Which of the following is true of defined benefit retirement plans?
A) In these plans, the investment risk is borne by the employee.
B) In these plans, the amount of benefit paid at retirement is predetermined.
C) They are most common in private sector and nonunion workforces.
D) They typically do not guarantee benefits.

Question

Quizplus · Accepted Answer

Defined benefit retirement plans are retirement plans where the amount of benefit paid at retirement is predetermined based on factors such as salary and years of service. This means that the employer bears the investment risk, not the employee. These plans are more common in public sector and union workforces, rather than private sector and nonunion workforces. Defined benefit plans typically guarantee benefits to their participants.

Which of the Following Is True of Defined Benefit Retirement