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Are employees more likely to favor defined contribution plans over defined benefit plans?
How about employers? Explain your answer.
Orginal answer please
Solution
Defined benefit (DB) pension plans have fallen out of favor. Despite superior performance in
providing retirement income, employers are turning away from DB vehicles and toward the use
of defined contribution (DC) plans such as 401(k)s and 403(b)s as the sole savings/retirement
vehicle for their employees. This change in sentiment derives from a number of perceived
disadvantages of DB plans:

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Are employees more likely to favor defined contribution plans over def.docx

  • 1. Are employees more likely to favor defined contribution plans over defined benefit plans? How about employers? Explain your answer. Orginal answer please Solution Defined benefit (DB) pension plans have fallen out of favor. Despite superior performance in providing retirement income, employers are turning away from DB vehicles and toward the use of defined contribution (DC) plans such as 401(k)s and 403(b)s as the sole savings/retirement vehicle for their employees. This change in sentiment derives from a number of perceived disadvantages of DB plans: