HR Assignment Help On Contribution Plans Compare and contrast
Cash-balance, defined benefit, and defined contribution plans are retirement plans for employees. At the same time, a cash balance plan is a defined benefit plan that defines the promised benefits of a stated account balance (Monks & Minow, 2011). As per HR case study assignment help experts, Cash balance plans are established for the primary benefits of the employers that give large amount of contribution in pension plans.
Advantages and disadvantages Cash balance plan: It has larger tax deductable contributions. Savings for retirement people are increased and funding system are easy to understand. It does not have investment risks and account balances are easy to understand for employees under this plan (Forcier, 2003). At the same time, administrative cost is higher as compared to other plans. In this, annual minimum contributions and coordination of investment policy with funding policy is required. Defined benefit plan: It provides retirement income with no efforts and offer specific benefit at retirement to each employee. In that, employees can decide the money that they contribute in the plan (Graney, 2004). But at the same time, this plan has limited potential and employees can know the actual money that they will receive in retirement. In this, other person is handling all investment decisions on behalf of employees. Defined contribution plan: The advantage of this plan is the facility for pensioner to determine the contribution money and its investment at certain level of money (Monks & Minow, 2011). The disadvantage of this plan is the possibility that the investment will not perform according to the expectation of pensioners and give them less secure retirement.
Increased use by organizations In present, the use of these pension plans is increased rapidly due to their benefits such as tax deferred retirement savings, need for larger retirement contributions and government desires that private funded pension plans help the employees in retirement (Gary & Naegele, 2011). Along with this, higher tax rates for small business owners and professional increase the use of pension plans. These provide income security in retirement for employees and there is no risk of investment to employees and employers. Avail 100% original HR assignment help and human resource case study assignment help from our experts at info@www.assignmenthelpexperts.com