Purchase Solution

What is the difference between a 401(k) plan and a pension plan?

Not what you're looking for?

Ask Custom Question

Can you please explain the difference between a 401(k) plan and a pension plan?

Purchase this Solution
Solution Summary

In a brief 140 words, this solution discusses what a pension fund is and what a 401k is and how they differ. A source is provided.

Solution Preview

A pension fund is a defined benefit plan where your employer (usually) provides the money and selects an administrator to make investment decisions. When you retire, you receive a fixed monthly benefit. On the other hand, ...

Solution provided by:
Sandeep Bardia, MBA
Education
  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
Recent Feedback
  • "Thank you. "
  • "Thank you"
  • "Thank you. I got 20/20 last week for my discussion you help me out with."
  • "Thank you. Great Job. "
  • "Thank you. Great Job. "
Purchase this Solution
Free BrainMass Quizzes
Motivation

This tests some key elements of major motivation theories.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

View More Free Quizzes
Related BrainMass Solutions

  • Defined Contribution vs Defined Benefit Plan & Pension Expense

    Defined Benefit Plan & Pension Expense 1. What are the differences and similarities between a defined contribution plan and a defined benefit plan? As an employee, would you rather have a defined contribution plan or a defined benefit plan? Why?

  • overfunded pensions

    What that ultimately means is that the plan participant is to recieve a defined amount for a defined length of time. For comparative purposes, a 401(K) is a defined contribution plan.

  • The advantages of 401(k) contribution in cash vs stock

    106954 The advantages of 401(k) contribution in cash or stock? What are the implications if the employer's contribution to the 401(k) plan is made in stock rather than in cash? What are the advantages and disadvantages?

  • 401K Statements

    C is true, and D is also true. D is due to the GAAP rules for pension plan accounting.

  • Retirement Programs and Employee Benefits

    A 401(k) plan is a contribution plan where an employee contributes a portion of their salary before taxes. A 401(k) plan is sometimes matched by an employer for a certain percentage.

  • Business Math for Typical Categories

    , and what are the limitations and downsides of having a 401(k) plan.

  • Job offers and payoff decisions

    A defined benefit is given to you at a certain time and age and is based on a formula of what the state can afford and not so much on what you contributed into the program so the payout is uncertain and you cannot invest the full amount as it just pays

  • Pension Plans

    141173 Pension Plans What are defined benefit and defined contribution pension plans and do companies regularly do a lot of switching between the two plans and if so why?

  • Lump sum required

    As per invest faq "A 401(k) plan is a retirement savings plan that is funded by employee contributions and (often) matching contributions from the employer.

View More Related Solutions