In defined contribution plans, _____.
A) investment risks are borne by employees
B) the amount of benefit paid at retirement is predetermined
C) benefits are guaranteed by the Pension Benefit Guaranty Corporation (PBGC)
D) the amount of contribution changes on the basis of actuarial assumption

Question

Quizplus · Accepted Answer

In defined contribution plans, investment risks are borne by employees, as they are responsible for investing their contributions and managing their own individual accounts. The amount of benefit paid at retirement is not predetermined and is dependent on investment returns, contributions made, and other factors, and benefits are not guaranteed by the PBGC. The amount of contribution may be determined by the employer or by the employee, but it does not change on the basis of actuarial assumption.

In Defined Contribution Plans, _____