Tessy, a senior accountant at a private bank in Massachusetts, retired at the age of 62. Upon retirement, she received a benefit amount from the bank. This benefit amount equaled the total sum of money she had added to her pension plan each year plus the amount that the bank added to it every year. In this scenario, the sum of money that Tessy received post retirement comes from the _____.

Question

Quizplus · Accepted Answer

The sum of money Tessy received post-retirement, which includes contributions from both her and her employer, is characteristic of a defined contribution plan. This type of retirement plan is funded by contributions from the employee, the employer, or both, and the retirement benefit is based on the amount contributed and the performance of the investments.

Tessy, a Senior Accountant at a Private Bank in Massachusetts