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What is the difference between the defined benefit scheme and the defined contributory scheme?

April 26, 2017benefit contributory defined difference Scheme

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What is the difference between the defined benefit scheme and the defined contributory scheme?

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Whereas the Defined Benefit pegs the amount a retiree could receive, the new scheme, based on Defined Contribution (DC), is a function of the level of an employee and employer’s contribution in addition to returns on investment. Under the DC, the pension is immediately funded as funds exist from the outset and payments will be made as and when due.