Defined contribution plans are costlier for employers than defined benefit plans. (Defined Contribution Plans)

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Defined benefit plans require employers to make a specific promise to provide a certain level of retirement benefits to employees, regardless of investment returns. Defined contribution plans, on the other hand, only require employers to contribute a certain amount to each employee's retirement account, leaving investment risk and decision-making to the employee. Therefore, defined contribution plans are generally less costly for employers than defined benefit plans.

Defined Contribution Plans Are Costlier for Employers Than Defined Benefit