BANKING AFFAIRS

Detailed explanation-1: -Defined-benefit plans and defined-contribution plans are two retirement savings options. Defined-benefit plans, otherwise known as pension plans, place the burden on the employer to invest for their employees’ retirement years and deliver a defined monthly amount once they retire.

Detailed explanation-2: -Defined benefit plans provide a fixed, pre-established benefit for employees at retirement. Employees often value the fixed benefit provided by this type of plan. On the employer side, businesses can generally contribute (and therefore deduct) more each year than in defined contribution plans.

Detailed explanation-3: -Defined Contribution Plan is a retirement plan in which the employee and/or the employer contribute to the employee’s individual account under the plan. The amount in the account at distribution includes the contributions and investment gains or losses, minus any investment and administrative fees.

Detailed explanation-4: -A Defined Contribution (DC) pension scheme is a type of workplace pension where a fund of money is built up consisting of your own contributions, those your employer makes and tax relief from the Government.