Employer advantages of defined contribution plans versus defined benefit plans include all of the following except:
A) vesting is usually faster.
B) pre-retirement contributions are smaller.
C) pension costs are more predictable.
D) employee mobility is facilitated.

Question

Quizplus · Accepted Answer

This statement is incorrect. Pre-retirement contributions are usually higher for defined contribution plans as employees are responsible for funding their own retirement accounts. The correct advantages are A, C, and D. Vesting is usually faster in defined contribution plans as employees have immediate ownership of their contributions, pension costs are more predictable for employers as they only need to contribute a fixed amount, and employee mobility is facilitated because employees can take their retirement accounts with them when they change jobs.

Employer Advantages of Defined Contribution Plans Versus Defined Benefit Plans