MYLAB ECONOMICS WITH PEARSON ETEXT -- A
MYLAB ECONOMICS WITH PEARSON ETEXT -- A
5th Edition
ISBN: 2819260099840
Author: Mishkin
Publisher: PEARSON
Question
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Chapter 13, Problem 2LO
To determine

  1. The distinctions between defined-benefit and defined-contribution pensions
  2. The key features of private and public pension plans.

Context Introduction:

Pension plan is a retirement annuity plan where a person receives regular monthly or quarterly income after he stops working. The income may be received for lifetime or for a particular period. It can ease the livelihood of people post their retirement.

A defined benefit plan is a retirement annuity account where your employer/employers contributes the money from your salary and promises you a set payout at retirement. It is also known as a pension. A defined contribution plan, on the other hand, is like an annuity plan that requires you to put in your own money gradually that will mature when you retire.

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