DQW4 - W hat are the differences and similari ties between...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
What are the differences and similarities between a defined contribution plan and a defined benefit plan? As an employee, would you rather have a defined contribution plan or a defined benefit plan? Explain why. As an employer, would you rather offer a defined contribution plan or a defined benefit plan? Explain why. One of the main differences between a defined-contribution plan and a defined-benefit plan is that the employees are the beneficiaries of a defined-contribution trust and the employer is the beneficiary of a defined-benefit trust. The purpose of a defined-benefit plan is to safeguard the company’s investment into the trust so that the funding will be available to pay-out to the recipients of their pension plan. As an employee, I would rather have a defined-contribution plan. Mostly because the trust is separate and distinct from the employer. Another reason is that in a 401k, for example, the employee has more say over how their retirement fund is invested. As an employer I think I would rather offer a defined-benefit plan. The reason being that
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 2

DQW4 - W hat are the differences and similari ties between...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online