Economics: The Basics 1st Edition by Mike Mandel

Exercise 4

Employer retirement plans are an important element of retirement income.
a) Explain the difference between defined benefit and defined contribution retirement plans.
b) Suppose an employer offers a plan that invests a sum of your money as well as its own money in the stock market each year. Then, when you retire, you get the current value of the invested money. Is this a defined benefit or a defined contribution plan?