A defined contribution pension plan is one in which the employer agrees to do which of the following?
A) To make payments to a specified pension plan with no guarantee of a specific pension amount to be paid to the employees.
B) To make actuarially determined payments to a pension plan AND to guarantee that the employees will receive a specified pension benefit (usually determined by length of service and salary).
C) To make actuarially determined payments to a pension plan that guarantees employees will receive a specified pension (usually determined by length of service and salary).
D) To pay specified amounts (usually determined by length of service and salary) to the employees upon retirement.

Question

Quizplus · Accepted Answer

In a defined contribution pension plan, the employer agrees to contribute a specified amount to the plan, but there is no guarantee of the specific pension amount that will be paid out to employees upon retirement. The retirement benefits depend on the contributions made and the investment performance of those contributions.

A Defined Contribution Pension Plan Is One in Which the Employer