In a defined-contribution plan:
A) only the employee makes contributions into the fund.
B) the retirement benefits will vary with both the amount contributed and the performance of the fund.
C) the benefits are determined mainly by years of service.
D) no vesting is required; employees are eligible for benefits from the time they make their first contribution.

Question

Quizplus · Accepted Answer

In a defined-contribution plan, the retirement benefits will vary with both the amount contributed and the performance of the fund. Unlike a defined-benefit plan where benefits are mainly determined by years of service, in a defined-contribution plan, the amount contributed and its performance will determine the retirement benefits that the employee will receive.

In a Defined-Contribution Plan