What are the different types of retirement plans available to employers?

In Washington, employers have a variety of retirement plans available to them. These plans are governed by Employment Benefits Law. The three primary types of plans are defined benefit, defined contribution, and cash balance plans. A defined benefit plan is a retirement plan that promises a specified monthly benefit at retirement. The employer contributes money to the plan and invests it in stocks, bonds, or other investments. The employer is responsible for all investment gains or losses. These plans are typically used by larger employers and offer the highest benefit amounts. A defined contribution plan is a retirement plan in which both the employer and the employee make regular contributions. This money is then invested in stocks, bonds, or other investments. The employer and employee share the risks associated with investing, and the benefit amount is determined by how much is contributed and the performance of the investments. These plans are typically used by smaller employers. Finally, cash balance plans are a hybrid of defined contribution and defined benefit plans. With these plans, the employer contributes a fixed amount, usually as a percentage of salary, to the employee’s account, and the employee can also contribute. The money is then invested, and the benefit amount is determined by the performance of the investments. These plans are growing in popularity as they offer greater flexibility to both employers and employees. In conclusion, there are three primary retirement plans available to employers in Washington: defined benefit, defined contribution, and cash balance plans. Each plan offers a different level of retirement benefits and requires different levels of investment risk. Employers should consider their financial situation and personnel needs when deciding which plan is best for their company.

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What are the different types of retirement plans available to employers?

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