Introduction
Employer sponsored retirement plans are broadly classified into two categories; defined benefit pension scheme (DB) and defined contribution plans (DC). As the name suggests, in a defined benefit pension scheme, a defined pension is paid to employees every month/quarter after the retirement till the end of life. On the other hand, in a defined contribution plan, employees and employers contribute and invest funds over time to build a retirement fund. Both the schemes are different from the perspective of who bears the risk, growth opportunities of funds and administration and distribution of funds (JCT, 2002). Defined benefit plans are ...
