Explain how the time value of money has an impact

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Q1. Outline what you think are the important factors that should be considered by tertiary sector employees when they are deciding whether to place their superannuation contributions in the Defined Benefit Plan or the Investment Choice Plan. What issues relating to the concept of the time value of money may be important in this decision-making process?

Q2. Explain how the time value of money has an impact on the potential investment returns and retirement savings of participants in both the Defined Benefit Plan and the Investment Choice Plan. Would you be correct in saying that participants who opt for the Defined Benefit Plan are foregoing potential gains in investment earnings and returns generated in connection with the time value of money?

Reference no: EM132625684

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