The company does it all. This substantially eliminates the fears expressed above that people will fail to participate or invest badly and arrive at retirement with nothing. Related to the topic of employer discretion is the fact that each employer can tailor the program as it likes. Differing matches, differing vesting, differing investments, differing communications and on can make programs hard to understand. But as in all things there is an opposite side.
Employees tend to move around in our mobile society.
With traditional retirement plans there is often a huge loss of benefits associated with leaving the company. Usually you can not take much of a defined benefit pension plan with you from one company to another. In this way you preserve all the tax advantages associated with the plan. Unfortunately, perhaps, the law also allows you to simply take the money and spend it. This is almost always a terrible decision .