You get a job with the Allred Corporation. Its retirement plan will pay you $250 a month for each year you work for the company; payments begin on your 65th birthday. You must work for the company for 10 years in order to qualify for the pension. This plan is a

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The plan described is a defined-benefit plan because it specifies the amount you will receive upon retirement, which is determined by your years of service. Unlike defined-contribution plans, where the benefit depends on investment performance, a defined-benefit plan promises a specific monthly payment.

You Get a Job with the Allred Corporation