Final answer:
Employers assume the economic risk for defined benefit pension plans, being responsible for investing and managing the funds necessary to meet the pension obligations to retirees.
Step-by-step explanation:
The economic risk for defined benefit pension plans is primarily assumed by the employers. Under such plans, it is the employer's responsibility to make sure the promised benefits are available for retirees. This means the employer invests funds on behalf of employees and bears the financial risk if the investments do not perform sufficiently. In contrast, with defined contribution plans like 401(k)s and 403(b)s, the employee bears more of the investment risk, as the retirement benefit is based on the performance of the investments made with the contributions from both employer and employee.
While trustees may handle managing the pension funds and actuaries are central to calculating the necessary contributions and forecasting pension obligations, it is the employer that is both legally and economically bound to ensure the provision of the defined benefits. Additionally, employers are also required to contribute to the Pension Benefit Guarantee Corporation, which provides a safety net for pension benefits in events where a company cannot pay what it promised.