What do you think are the important factors that should be considered by tertiary sector employees when they are deciding whether to place their superannuation contribution in the Defined Benefit Plan...

Corporate Finance
What do you think are the important factors that should be considered by tertiary sector employees when they are deciding whether to place their superannuation contribution in the Defined Benefit Plan or the Investment Choice Plan?
Introduction
In organizations due to mandatory compulsions or voluntarily the employees are provided with various retirement benefits by their employers. This can help to retain the employees of the company and reduce its attrition rate. There are various types of benefits which are delivered by the organization to their employees like pensions, provident funds, superannuation benefits and gratuity. Many employees do not have any idea of superannuation benefits and are often ignored. Most of the funds of the superannuation benefits are provided by the employer and it is therefore imperative for the individuals to understand the various benefits of the superannuation plan to have a better financial planning and plan their retirement efficiently (Cleartax, Jan - 2021).
Analysis
Superannuation benefits are offered towards the working employees or class of the company in the form of a retirement benefit. Hence, it is a pension program offered by the organizations to benefit the employees at the time and after retirement.
The compulsory superannuation contribution which is paid by the employers to the employees of the organization guarantees a minimum of 9.5% contribution based on the ordinary income of the employees by the employers. Also it does not matter whether the employee is a full time, casual and part time; is temporary resident of Australia. thus to be eligible of superannuation guarantee contribution from an employer the employee must be more than 18 years old and over as well as is paid $450 or more monthly before tax (Australian Taxation Office, 2020). Also, the employee must work more than 30 hours per week to be eligible for the super contributions from the employers.
On the other hand the employees who will not be eligible for super contributions are the employees under 18 years of age. If the employees works less than 30 hours per week and the work is of private and domestic nature. If the employee is a non-resident of Australia and is paid to work outside Australia and also a senior foreign executive who is on a special visa, he/ she will not be entitled to get super contribution from the employer.
There are two types of superannuation plans. These are (1) Defined benefit plans (2) Defined contribution plans. We will discuss both in details for the purpose of identifying and choosing the best option for the individual after their retirement so that they can earn from investments.
Defined benefit plans: The benefits acquired from this plan are fixed whatsoever may be the contribution of the plan. The benefits that are derived from this plan are based on various significant factors like the joining age of the employees, number of years of service in the company, the salary drawn till the last date of retirement. Based on these issues the employees will start reaping the various benefits from this plan. It is a complex process and the risk which arises from this plan from which the various benefits is derived is based on the employers. Based on the already existing formula the calculation of the defined benefit plan is made at the time of retirement which is received by the employee in a fixed amount (Julia Kagan, 2020).
Defined contribution plans: The defined contribution plan is just the reverse of the defined benefit plan. While the defined benefit plan provides a fixed amount to the individual on their retirements the defined contribution plan has a fixed amount which needs to be contributed while its benefits are based upon the contribution made as well as the market forces. These types of plans are better and easy to manage as the risk of the benefits is with the employees as there is no assurance of the amount that will be received by him. Thus, the amount can be more than the fixed contribution or will be restricted only to the fixed contribution. The defined contribution plan is also known as investment choice plan (Cleartax, 2021).
As per a research conducted...