Which of the following describes a defined benefit plan?
A)Provides fixed income to the plan participants based on a formula.
B)Distribution amounts determined by employee and employer contributions.
C)Allows executives to defer income for a period of years.
D)Retirement account set up by an individual.

Question

Quizplus · Accepted Answer

A defined benefit plan is a retirement plan in which the employer promises to pay a fixed income to the plan participants based on a predetermined formula, typically based on the employee's salary and years of service. The amount of the benefit is not dependent on the amount of employee or employer contributions.

Which of the Following Describes a Defined Benefit Plan