Retirement Plans: 401(k)s, IRAs and Other Deferred Compensation Approaches 10th Edition by Allen, Joseph Melone, Jerry Rosenbloom, Dennis Mahoney

Exercise 3

Prepare a graph similar to the ones created in the preceding question for an employee participating in a defined contribution plan providing a contribution of 6 percent of compensation, and compare your results with the previous graphs. What conclusions can you draw about the allocation of employer contributions under a defined contribution plan vis-a?-vis those of a defined benefit plan? What implications do these conclusions present for the retention of older employees?