Features of a 401(k)plan include all of the following except:
A)Pension benefits are based on past earnings and length of service with the company.
B)The employer may match a certain portion of the employee's investment.
C)Taxes are deferred on wages invested in the plan.
D)Investments may be made in company stock,mutual funds or other investment vehicles.

Question

Quizplus · Accepted Answer

The features listed in options B, C, and D are all common features of a 401(k) plan. Option A is not a feature of a 401(k) plan, but rather a feature of a traditional pension plan. In a traditional pension plan, retirement benefits are calculated based on a formula that takes into account the employee's years of service with the company and their earnings history.

Features of a 401(k)plan Include All of the Following Except