Melissa's retirement plan is described in her employee handbook as follows:
Noncontributory
Cliff vesting $ (100 \%) $ after 3 years of full-time employment
Monthly retirement benefit based on average salary over the last 3 years of employment and the total number of years worked for the company

Which of the following statements about this retirement plan is(are)true?

Question

Melissa's retirement plan is described in her employee handbook as follows: 
Noncontributory
Cliff vesting $ (100 \%) $ after 3 years of full-time employment
Monthly retirement benefit based on average salary over the last 3 years of employment and the total number of years worked for the company

Which of the following statements about this retirement plan is(are)true?

Quizplus · Accepted Answer

This retirement plan is noncontributory, meaning Melissa does not have to contribute to the plan. However, the plan does have cliff vesting, which means Melissa will not receive any benefits if she leaves the company before working full-time for 3 years. Melissa does not have to make investment decisions regarding her retirement plan since it is not a defined contribution plan. Therefore, option C and D are incorrect. Option E is also incorrect since only option B is true.

Melissa's Retirement Plan Is Described in Her Employee Handbook as Follows