Which of the following statements about retirement benefits under pension plans is true?

Question

Quizplus · Accepted Answer

A unit-benefit formula considers both earnings and years of service to calculate retirement benefits. Option A is incorrect because a flat percentage of annual earnings formula provides higher dollar benefits to higher earners. Option B is incorrect because a benefit using final pay is usually based on an employee's earnings during the last 1-3 years of participation in the plan, not just the last month. Option D is incorrect because past service benefits are the result of crediting a participant's account with benefits for years of service completed before the plan began or before the participant entered the plan.

Which of the Following Statements About Retirement Benefits Under Pension