•Each party contributes to the retirement fund; the employee contribution is
almost always fixed—i.e., does not vary
from one year to the next.
•The retirement benefit is guaranteed, and is usually based on age,
“final” salary, and years of service: “2% @ 55”
•The money is managed in a pool to reduce overhead.
•Often benefits and contributions rates are negotiated.
•Investment risk is the responsibility of the employer.
•Risks are spread over time.