Compare and contrast a defined benefit and a defined contribution pension plan.
In a defined benefit plan, retirement benefits are defined by a formula that generally considers the worker's age, salary, and years of service. The employee and/or the organization contribute the amounts essential to reach the goal. In a defined contribution plan, the contributions to be build by the employee and/or employer are spelled out, but retirement advantages depend on the total accumulation in the individual's account at the retirement date.