The Social Security System in the U.S. is best described as a:
A) defined benefits plan.
B) defined contribution plan.
C) employer funded plan.
D) pay-as-you-go system.

Question

Quizplus · Accepted Answer

The Social Security system in the U.S. is a pay-as-you-go system, where current workers' payroll taxes fund the benefits of current retirees. It is not a defined benefits plan or defined contribution plan as the benefits are based on a formula and not individual accounts, and it is not an employer-funded plan as the funds come from payroll taxes rather than employer contributions.