Final answer:
The greatest advantage of a defined benefit pension plan is that it makes retirement planning easier by guaranteeing a fixed retirement income, regardless of investment performance.
Step-by-step explanation:
The greatest advantage of a defined benefit pension plan for the employee is B. Defined benefit plans make retirement planning easier. This type of plan guarantees a certain payout at retirement, which provides a predictable and stable source of income. In contrast to defined contribution plans like 401(k)s, where the retirement benefits depend on investment returns, a defined benefit plan promises a specified monthly benefit upon retirement that is predetermined by a formula based on the employee's earnings history, tenure of service, and age.
Unlike defined contribution plans, which shift investment risks to employees, defined benefit plans shift this responsibility to the plan provider, generally the employer. This means that retirees relying on a defined benefit plan do not need to worry about the performance of their investments possibly affecting their retirement income. Furthermore, the reliance on employer contributions rather than employee contributions makes retirement income more foreseeable, eliminating the need for the employee to make complex investment decisions.