Question

In: Finance

A defined contribution retirement plan can be advantageous for an employer because: the employer may take...

A defined contribution retirement plan can be advantageous for an employer because:

the employer may take t

Solutions

Expert Solution

ANSWER DOWN BELOW. FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

A defined contribution retirement plan can be advantageous for an employer because:

the employer may take the certain % of employees payroll as base and contribute to employees retirement plan accounts, Employers contribution is defined.

Defined contribution pension plans:

It is a plan in which participants contribute a certain % of their payroll to their own retirement plan accounts, usually in form of a deduction in their payroll.

Advantages:

1. The employer's contribution is defined.

2. During Great market conditions, there is no upper limit to Amount the participants can get. Its beneficial is the retirement happen during Great market conditions.

Disadvantages:

1. The benefits of the member during retirement is not defined.

2. During the recession, the Defined contribution pension plans are not useful because they don't give a guarantee of a certain benefit to the members.


Related Solutions

(1)An employer may account for a pension plan using a defined-contribution plan or a defined- benefit...
(1)An employer may account for a pension plan using a defined-contribution plan or a defined- benefit plan: (a) In two paragraphs, please explain the difference in these plans and (b) who will bear the risk of loss under each plan. What entries (debits and credits) will be made by the employer for pension expense under a defined-contribution plan and how will the amount for pension expense be determined What entries (debits and credits) will be made by the employer for...
Your employer gave you an option between a defined contribution pension plan and a defined benefit...
Your employer gave you an option between a defined contribution pension plan and a defined benefit pension plan. Recall what each plan offers and choose the plan that works best for you. Support your response with facts about each plan. Also, consider the accounting method your employer uses to report these expenditures. How does this method compare to an Endowment fund? Identify any similarities and differences between pension plan reporting and endowment fund reporting.
Question 1 In a defined contribution pension plan, the retirement benefits to the employee are not...
Question 1 In a defined contribution pension plan, the retirement benefits to the employee are not defined. True or False Question 2 Saved Employees are not allowed to make contributions to a defined contribution pension plan. True or False Question 3 Current service cost is usually the largest single component of pension expense under a defined benefit pension plan. True or False Question 4 In a defined contribution plan, employers run the risk of high pension contributions. True or False...
1.) Explain the difference between “defined-benefit” retirement plans and “defined-contribution” retirement plan. Which approach is better?...
1.) Explain the difference between “defined-benefit” retirement plans and “defined-contribution” retirement plan. Which approach is better? Why? 2.) Discuss the various components of the National Social Security Program. Explain the extent of its coverage and it’s membership. Explain how it is financed, how it pays benefits to its members. What it’s solvency. Provide recommendations for long term sustainability. Please source
Describe how​ employer-sponsored retirement plans work in general. In an​ employer-sponsored retirement​ plan, the money can...
Describe how​ employer-sponsored retirement plans work in general. In an​ employer-sponsored retirement​ plan, the money can be invested in any type of investment account chosen by the employee. you​ and/or your employer contribute money to a retirement account each pay period. the money is taxed at the capital gains tax rate. the money is taxed when the contribution is made.
Recent changes in how employees receive retirement, e.g. through a defined contribution plan vs. a defined...
Recent changes in how employees receive retirement, e.g. through a defined contribution plan vs. a defined benefit plan, have caused many to question whether they can retire at the age they expected. Please address responses to the following questions: What is the main difference between the 401(k)-type, e.g. defined contribution plans, vs. traditional pension plans, e.g. defined benefit plans? Which type of retirement plan do you prefer and why?
Recent changes in how employees receive retirement, e.g. through a defined contribution plan vs. a defined...
Recent changes in how employees receive retirement, e.g. through a defined contribution plan vs. a defined benefit plan, have caused many to question whether they can retire at the age they expected. Please address responses to the following questions: What is the main difference between the 401(k)-type, e.g. defined contribution plans, vs. traditional pension plans, e.g. defined benefit plans? Which type of retirement plan do you prefer and why? What type of retirement plan do you have at your place...
The City of Sweetwater maintains an Employees’ Retirement Fund, a single employer defined benefit plan that...
The City of Sweetwater maintains an Employees’ Retirement Fund, a single employer defined benefit plan that provides annuity and disability benefits. The fund is financed by actuarially determined contributions from the city’s General Fund and by contributions from employees. Administration of the retirement fund is handled by General Fund employees, and the retirement fund does not bear any administrative expenses. The Statement of Fiduciary Net Position for the Employees’ Retirement Fund as of July 1, 2016, is shown here: CITY...
The City of Sweetwater maintains an Employees’ Retirement Fund, a single employer defined benefit plan that...
The City of Sweetwater maintains an Employees’ Retirement Fund, a single employer defined benefit plan that provides annuity and disability benefits. The fund is financed by actuarially determined contributions from the city’s General Fund and by contributions from employees. Administration of the retirement fund is handled by General Fund employees, and the retirement fund does not bear any administrative expenses. The Statement of Fiduciary Net Position for the Employees’ Retirement Fund as of July 1, 2016, is shown here: City...
Post a comment below-Thanks As soon as possible   defined-benefit plan is an employer-sponsored retirement plan where...
Post a comment below-Thanks As soon as possible   defined-benefit plan is an employer-sponsored retirement plan where employee benefits are computed using a formula that considers several factors, such as length of employment and salary history. The company administers portfolio management and investment risk for the plan. There are also restrictions on when and by what method an employee can withdraw funds without penalties. Defined-benefit plans, aka pension plans or qualified-benefit plans, are termed "defined" because employees and employers know the...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT