Which of the following factors has a greater impact on defined contribution plans compared to defined benefit plans?

Investment performance has a greater impact on defined contribution plans compared to defined benefit plans because, in defined contribution plans, the retirement benefits depend primarily on the contributions made to the plan and the investment returns generated from those contributions. Employees accumulate account balances through individual contributions and, in many cases, employer matching contributions, which are then invested in various financial instruments. The success of these investments directly influences the amount available for retirement, making investment performance critical to the overall funding of a participant's retirement.

In contrast, defined benefit plans promise a specific retirement benefit amount, typically based on salary history and years of service, regardless of investment performance. The employer bears the investment risk in these plans, which means fluctuations in market performance do not affect the benefits promised to employees. Thus, while all factors mentioned can influence retirement security, investment performance is uniquely pivotal for defined contribution plans, where the individual participant bears the investment risk and responsibility for their retirement savings outcomes.