Alexis is choosing between a job in the National Parks Service, which offers a pension plan, and a forestry contracting job with a 401 (k) plan. Why would Alexis choose the 401 (k) plan over the pension plan?

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Coco

26 March, 03:11

Alexis is choosing between a job in the National Parks Service, which offers a pension plan, and a forestry contracting job with a 401 (k) plan. Why would Alexis choose the 401 (k) plan over the pension plan?

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Stephanie · Answer 1

One advantage of the 401 (k) plan over the job with the pension plan is that a pension plan is dependent on the employer in a specific way in which if the employer announced bankruptcy, the company is no longer required to pay the pensions. A 401 (k) gives more security to the employer as it protects them from this situation.