MBA (Finance)III – Semester, Merchant Banking and Financial Services, Unit 5.4
Advantages and Disadvantages of Defined Contribution Pension Plans
The main advantage to the employees is that the pension fund investment is market-linked. They can make excellent returns on the investments through proper selection of portfolio of investments.
Advantages
of Defined Contribution Pension Plans
The main advantage to the employees
is that the pension fund investment is market-linked. They
can make excellent returns on the investments through proper
selection of portfolio of investments.
The advantage for the
employer is that it doesn’t have to worry about the management of the pension
funds and the returns generated by them.
Disadvantages
of Defined Contribution Pension Plans
The disadvantage to the employees is that there
is a chance of getting lower amount of pension due to improper selection of
investment.
Continuous monitoring is a burden to the
employees.
