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Investment united states pooling in defined benefit plans also creates value in several ways - liquidity, professional management, asset allocation, and expense reduction. A retiree needing a monthly income from an individual account must keep some funds in liquid form, perhaps cash or money market investments. This lowers the account's investment income. A defined benefit plan needs to keep a much smaller percentage of its funds in liquid form due to the mix of active and retired employees and the continuing inflow of employer contributions. Many 401(k) plans rely on the united states participant to make investment decisions. Thus, defined contribution plan benefit united states levels are dependent on an individual's investment skills or luck, and on the individual's conceptions and misconceptions. The result is a wide variation of ultimate retirement benefits across participants based on individual choices, skill, luck, and understanding.
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