Barb: Problems With Define Provension Plan

344 Words2 Pages
Barb: Problems with defined contribution pension plans.
A defined benefit pension plan promises an employee an income at retirement “based on their pay and length of service” (Falling Short - Workers are sleepwalking towards an impoverished old age, 2008) whereas a defined contribution plan is one where the financial outcome “depends on the investment performance of the fund that the employee has paid into” (Falling Short - Workers are sleepwalking towards an impoverished old age, 2008).
Most employers now have a defined contribution plan where an employee is selecting from different investment options such as stocks, bonds, and mutual funds. They select which investment plans and what percentage of their contribution goes into each investment.

More about Barb: Problems With Define Provension Plan