Which of the following statements regarding defined contribution plans is false?
A) Employers typically match employee contributions to the plan to some extent.
B) An employer's vesting schedule is used for employers' contributions in determining the amount of the plan benefits the employee is entitled to receive on retirement.
C) Employers bear investment risk relating to the plan.
D) Employees immediately vest in their contributions to the plan.

Question

Quizplus · Accepted Answer

Defined contribution plans shift the investment risk from the employer to the employee. Option A is true as employers do match employee contributions to some extent. Option B is also true as an employer's vesting schedule is used to determine the amount of plan benefits an employee is entitled to receive upon retirement. Option D is also true as employees immediately vest in their contributions to the plan. Therefore, option C is false as employers do not bear investment risk relating to the plan.

Which of the Following Statements Regarding Defined Contribution Plans Is