There are several reasons why people stay or move on from their employers. However, two main factors that seem prevalent in individuals leaving their jobs is dissatisfaction with their salary or overall benefits (Price, Kiekbusch, & Theis, 2007). People need to feel of sense of financial security. As employers try to retain the best talent, they must ensure they are offering meaningful plans to the employee. As with any program provided, there are pros and cons to both the employee and the company. Some employees may prefer defined benefits plans over defined contribution plans. However, employers without a doubt prefer a defined contribution plan because it is less costly to the business plus they do not have the financial burden of providing …show more content…
Therefore, all proposals must be consistent and in compliance with state and federal laws regardless if the firm has a defined contribution plan or defined benefits. A defined benefit plan namely a pension program is a form of retirement account in which the employer forks up all the money and promises to give the payout upon the person’s retirement. Pension plans were ongoing since the employee just needed to show up for work. Additionally, the pension plan took into account how long a person was on the job along with their earing average salary. In general majority of defined benefits plans no longer exist. On the other hand a defined contribution plan namely, 401K require a person to put their own money into their 401 K plan. Some organization offer 401 K plans that only contribute if an employee puts in a specific dollar amount into their retirement plane. Other firms may offer a safe harbor plan in which the employer adds money regardless if the employee puts any money into their retirement fund. Additionally, the Safe harbor designs exist for all types of plans from the relatively simple balance-forward profit sharing plan (McKinney,