Which of the following are examples of defined contribution plans? (Select all that apply.)

Question

Quizplus · Accepted Answer

Defined contribution plans are retirement plans in which the employer and/or employee contribute a set amount of money each year. The amount of money that the employee will receive upon retirement is determined by the contributions made and the investment returns on those contributions. Examples of defined contribution plans include IRA (individual retirement account), SIMPLE (savings incentive match plan for employees), and 403(b) plans for non-profit organizations. A pension, on the other hand, is an example of a defined benefit plan in which the employer guarantees a specific retirement benefit based on factors such as years of service and salary. Therefore, option B (pension) is not an example of a defined contribution plan.

Which of the Following Are Examples of Defined Contribution Plans