Compare and contrast the risks to the employee in regard to defined-contribution and defined-benefit pension plans.

In a defined-benefit pension plan, retiring employees are guaranteed a particular payment level (i.e., the retirement benefit is "defined"). However, in a defined-contribution pension plan, the only guarantee to employees is that the employer will contribute a set dollar amount on their behalf to the pension plan (i.e., the contribution is "defined"). While the pension benefits under a defined-benefit plan are fixed, the pension benefits of the defined-contribution plan vary according to the success of the plan's investments (i.e., superior investment decisions will yield greater pension payments than mediocre or poor decisions).
Under the defined-benefit plan, retiree risk is largely limited to whether the fund is properly funded and whatever effects inflation will have on their fixed pension cheques. Under the defined-contribution plan, retiree risk is associated with the general risks and rewards of investments, the quality of investment advice, and the risks commonly associated with the defined-benefit plans.