Benefit Offset

You belong to a pension plan. Under the plan, you are supposed to receive $500 a month. However, you skipped some of your scheduled contributions, and now you owe the plan money.

A benefit offset would lower the amount you receive from the fund until your payments to the plan are up-to-date. So you might receive only $400 a month until you get square with the pension program.

These kind of provisions are laid out in the pension rules and fall under a number of governmental regulations. The benefit offsets protect companies and pension plans from freeloaders, but there are rules in place to make sure that these offsets are applied fairly.