ABC Corporation offers its employees a defined contribution plan as part of its compensation package. Under this plan, the corporation contributes a fixed percentage of each employee's salary into individual accounts managed by the employees themselves. Employees can choose how to invest their contributions among a selection of pre-approved investment options. As an aspiring CFA candidate, it's essential to understand the implications of defined contribution plans on both the company's financial statements and the employees' retirement savings.
Which of the following statements about defined contribution plans is true?