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Asked by Terriona Hamilton on May 06, 2024

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Defined contribution plans are riskier for employees versus defined benefit plans.

Defined Contribution Plans

Retirement savings plans where the amount contributed to an employee's account is defined, but the payout at retirement depends on the account's investment performance.

Defined Benefit Plans

A retirement plan where employee benefits are calculated using a formula that considers factors such as salary history and duration of employment.

  • Pinpoint the elements that impact the amount of income one receives upon retirement and the uncertainties in retirement benefit plans.
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Zybrea KnightMay 08, 2024
Final Answer :
True
Explanation :
Defined contribution plans (such as 401(k) plans) do not guarantee a specific amount of retirement income and are subject to market risk, while defined benefit plans (such as traditional pension plans) provide a guaranteed retirement income. Therefore, defined contribution plans are riskier for employees as their retirement income may fluctuate based on investment performance.

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