Defined Contribution Pension Plans vs. Defined Benefit Pension Plan

[kasoker]

what are the differance between the 2?

thanks
ktm

p.s

the formula pdf is the same for L2 2010?

 

[David Harper CFA FRM]

ktm

In a DC (e.g., 401k), the annual contributions into the retirement fund are known/determined but the final payouts are based on investment performance
In a DB (traditional, still common but declining share; common for public employees, bigCo), the future payouts at retirement are promised, so the plan must be funded in anticipation
In a DC, employees bear risk; in a DB, sponsor bears risk.

this is a huge topic, here are intros:
http://en.wikipedia.org/wiki/Defined_contribution_plan
http://en.wikipedia.org/wiki/Defined_benefit_plan

re: formula pdf, i don't have a new one before May, will have new one for November

David

 

[kasoker]

thanks david

i realized that i know this topic very much but didn't knew the phrase

thanks anyhow.

AND THIS MYTE BE THE OPPROTONITY TO SAY THANKS ALOT FOR ALL THE HARD WPRK YOU PUT IN THE BT!!!

HOPE IT WILL GET ME TO PASS THE TEST....

REAL THANKS!!!!

 

[David Harper CFA FRM]

ktm - Thanks, good luck on exam!! David