In a defined benefit pension plan, the bears all of the fund's investment performance risk, while in a defined contribution pension plan, the bears all of the fund's investment performance risk. Multiple Choice O O O fund manager, employee government, employer employer, employee employee, employer
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- It refers to a plan where only the employer contributes to a retirement fund. a. Contributory plan b. Non-contributory plan c. Unfunded plan d. Libreko planIn a defined-benefit plan, a formula is used that Select one: a. requires that the benefit of gain or the risk of loss from the assets contributed to the pension plan be borne by the employee. b. requires that pension expense and the cash funding amount be the same. c. defines the contribution the employer is to make; no promise is made concerning the ultimate benefits to be paid out to the employees. d. defines the benefits that the employee will receive at the time of retirement.Benefits paid to members of a defined benefit p employment fund are based onil. investment returns generated by the fund.li. remuneration levels while err oyed.Ill. number of years of service.IV. the level of employer contributions made to the fund. Select one: a. Il and Ill only. b. I and I only. c. Il and IV only. • d. III and IV only.
- 1. Which of the following statements typifies defined contribution plans? Investment risk is borne by the corporation sponsoring the plan. O Retirement benefit is defined by a pension formula O The plans are more complex than defined benefit plans. O The employer's obligation is satisfied by making the periodic contribution to the plan.When a defined benefit pension fund has assets whose value is below the present value of its expected future obligations, the plan is Answers: a. Overfunded b. Underfunded c. Fully funded d. Defined contributionS1: Under a defined contribution plan, the amount of a participant’s future benefits is determined by the contributions paid by the employer, the participant, or both, and the operating efficiency and investment earnings of the fund. S2: Under a defined benefit plan, the payment of promised retirement benefits depends on the financial position of the plan and the ability of contributors to make future contributions to the plan as well as the investment performance and operating efficiency of the plan. Only S1 is true None is true Only S2 is true Both are true
- A Defined Benefit Plan defines the following: O A. Your (employee) contributions to the plan B. The rate of return on assets (stocks, bonds, etc.) in the plan C. In most cases, is funded almost entirely by the employer D. Both A & C E. None of the aboveUnder a defined contribution pension plan _________________ bear the investment risk, while under a defined benefit pension plan __________________ bear the risk. Group of answer choices employees / employees employers / employers employees / employers employers / employeesA Keogh plan is a type of qualified pension plan for self-employed individuals. An individual or entity that establishes a Keogh plan can: only establish a defined contribution profit-sharing pension plan. have both employees and self-employed individuals as participants. I. II. Oa. Only statement I is correct. Ob. Only statement II is correct. Oc. Both statements are correct. Od. Neither statement is correct. ( Previous Next 令) OLO
- Which of the following is not a characteristic of a defined-contribution pension plan? The employer's contribution each period is fixed. If the employer does not make contribution in full, then it reports a pension liability. If the employer contributes more than the required amount, then it reports a pension asset. An appropriate funding pattern must be established to ensure that the promised benefits at employees’ retirement will be met. The benefit of gain or the risk of loss from the assets contributed to the pension fund are borne by the employee.In a defined contribution plan, a formula is used that: Ensures that pension expense and the cash funding will be different Requires an employer to contribute a certain sum each period based on the formula Defines the benefits that the employee will receive at the time of retirement Ensures that the employer is at risk to make sure funds are available at retirementIn the discussion of employees' pension plans, your book talks about two pension plans - Defined Contribution Plan and Defined Benefit Plan. Which one of the following is an example of Defined Contribution Plan? a. Section 529 Plan b. 401k C. HSA Plan d. FUTA е. None of the above