Lesson 8 Employee-Funded Plans
With a Money Purchase Pension Plan or a profit-sharing plan, the employer makes all the contributions. All eligible employees receive a benefit.
On the other hand, 401(k), 403(b), and 457 plans are funded by employees out of their earnings. Participation is voluntary. Employees are free to contribute or not as they see fit.
A huge common problem with all employee-funded plans is that although employees bear the cost, they have almost no control over the quality of the plan. They must simply take what they are given and try to make the most of it. Too often, what they are given is disgracefully bad.
Employers are either indifferent or inept in selection of plan providers. They focus on features rather than results. ...
Get The Retirement Challenge: Will You Sink or Swim? now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
