Analyzethe following Case in this week's Module; Casesare short and intended to highlight a few key concepts from our Module; see syllabus and rubric for full details.

• Number all questions as indicated (1, 2, 3).
• Your answer must be responsive to the questions.
• Do not repeat the question.
• ONLY consult the CASE and your TEXT to respond to the questions. NO outside sources. Note: All information that is not common knowledge must follow the citation rules below (including any paraphrase).
• EACH question response must contain at least one quote and citation from our TEXT or CASE.
  • If from the TEXT, use QUOTES and a PAGE NUMBER, ex, "This is a quote from the text." (Text, page 88).
  • If from the CASE, use QUOTES, ex, "This is a quote from the case." (Case).
• Your answer must be 200 words or more.

Linda Calloway and Meredith Perdue are neighbors in Charleston. Linda works as a software engineer for Progressive Apps Corporation, while Sherry works as an executive for Industrial Container Company. Both are married, have two children, and are well paid. Linda and Meredith are interested in better understanding their pension and retirement plans.

Progressive Apps Corporation, the company where Linda works, has a contributory plan in which 5 percent of the employees' annual wages is deducted to meet the cost of the benefits. The firm contributes an amount equal to the employee contribution. The plan uses a five-year graded vesting procedure; it has a normal retirement age of 60 for all employees, and the benefits at retirement are paid according to a defined contribution plan.

Industrial container, where Sherry works, has a minimum retirement age of 60. Employees (fulltime, hourly, or salaried) must meet participation requirements. Further, in contrast to the Progressive Apps plan, the Industrial

Container program has a noncontributory feature. Annual retirement benefits are computed according to the following formula: 2 percent of the employee's final annual salary for each year of service with the company is paid upon retirement. The plan vests immediately.

Analysis

1. Explain the difference between a defined benefit and a defined contribution retirement plan.
2. Which plan reviewed in our case would you prefer; explain why?
3. Generally, what other sources of retirement income are available?