Employment-based Savings

By Melanie Higgs

Employer-sponsored savings plans come in several flavours. Most people are familiar with employer pension plans. Working for a company that offers a workplace pension plan is a great way to save for your retirement without much effort on your part.

The two most common employee pension plans are defined benefit plans (DB) and defined contribution (DC) plans. With DB plans, employees know what their pension income will be after they retire. With DC plans, employees know what they will be contributing each month to their pension, but not the amount of their pension following retirement.

Let's look at employee-sponsored savings plans in more detail:

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