The Pension Benefits Guaranty Corporation has consistently ensured that employees get their pension after retirement or when the firm or company they were working for collapses. This is an excellent initiative by the federal government without which many employees would lose their pension contribution mostly to firms which go bankrupt. As a future employee, I would prefer the defined contribution plan rather than the defined benefit plan in view of the projected future of PBGC. CFFI has suggested that in 15 years, PBGC will most likely not be able to pay employees their benefits due to lack of enough money. Already the corporation operates on a deficit of serious magnitudes and if the projections any ting to go by, it will be impossible or very difficult to get pension benefits from the government corporation due to lack of enough money. A contribution plan will ensure that I get pension commensurate with my contribution and earnings. It is mush safer to opt for the defined contributions plan because in this case pension benefits are provided on the basis of the contribution of the employee as well as that of the employer as opposed to monthly contributions. This offers guarantee for payment.
Originally posted 2016-10-25 09:59:48.