JKL Company just converted its traditional defined-benefit plan to another type of plan.Under the plan,benefits are defined in terms of a hypothetical account balance,with retirement benefits dependent upon the value of the participant's account at retirement.Each year,employees receive an interest rate credit and a pay credit which is a specified percentage of compensation.This type of plan is called a

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The described plan is a cash-balance plan, where benefits are defined by an account balance and employees receive interest and pay credits. A 401(k) plan is a defined-contribution plan where employees contribute a portion of their compensation and may receive employer matching contributions. Deposit-administration plan and trust fund plan are not specific types of retirement plans.

JKL Company Just Converted Its Traditional Defined-Benefit Plan to Another