What characteristic is specifically associated with pension plans?

The characteristic that is specifically associated with pension plans is that they are subject to minimum funding requirements. Pension plans, particularly defined benefit plans, are designed to provide a specific benefit amount to retirees based on a formula that typically considers factors such as salary history and duration of employment. To ensure that these future obligations can be met, the Pension Protection Act and other regulations require that these plans maintain a minimum level of funding.

This requirement is crucial for the financial stability of pension plans, as it helps safeguard the promised benefits for participants. Employers who sponsor pension plans must regularly assess their funding status and contribute sufficient amounts to meet these minimum standards. This characteristic distinguishes pension plans from retirement savings plans like 401(k)s, which typically do not have such stringent funding requirements and instead rely on contributions made by employees and employers but do not guarantee a specific payout.

Hardship distributions, employer contribution requirements, and flexible contribution limits are features more closely associated with other types of retirement plans, such as 401(k)s, making them less relevant for pension plans specifically.