Having a pension plan takes some of the burden off you as you save money for your retirement. The pension is a savings plan to which your employer makes contributions on your behalf. You receive the benefits of this plan when you retire. The government sets rules for private pension plans that must be followed.

412(i) Plans
A 412(i) plan is a defined benefit plan where all payments made to you are set up and specified in advance. The employer makes contributions to the plan which are guaranteed to meet all plan benefit promises in the future.

The plan may distribute funds no earlier than age 59 1/2, under most circumstances. A penalty of 10 percent applies to withdrawals made prior to this age. However, an exception to this rule under IRS rule 72t allows withdrawals from the plan based on your life expectancy to begin before 59 1/2. The withdrawals from the plan are made for at least five years or until your age 59 1/2, whichever comes later.

457 Plans
A 457 plan is one of a group of plans called deferred compensation plans; your employer invests the money he defers into a variety of investments chosen by the custodian of the funds, which is normally a brokerage firm or insurance company. The funds are then paid to you during retirement. A 457 plan may distribute funds as early as age 56 without you having to pay a 10 percent IRS early withdrawal penalty.

SEP IRAs
SEP IRAs are Simplified Employee Pensions. These plans are funded entirely by your employer and work similarly to other IRAs. The early withdrawal penalty applies to these plans, just as it would with any other IRA. However, the IRS rule 72t exemption also applies, making this plan ideal for early withdrawals in the event you want to retire before age 59 1/2.

Defined Contribution Plans
A defined contribution plan would be any number of employer-based plans, like 401(k) plans, 403(b) plans, a group annuity or another plan which allows contributions to the plan from you as well as your employer, and does not promise any specific benefit payment when you retire. These plans only allow withdrawals after age 59 1/2. However, these plans also allow systematic withdrawals prior to this age under either IRS rule 72t for non-annuity based retirement accounts, and 72q for annuity-based retirement plans.