When an employer makes pension fund contributions directly to a trustee who holds and invests those funds,the plan is said to be a(n)

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Funded pension plans involve contributions made by the employer to a trustee who then invests those funds to provide for future pension payments. Defined-contribution plans involve contributions made by both the employer and employee to an individual account for the employee, with no promise of a specific benefit amount in the future. Unfunded pension plans do not involve contributions set aside in advance for pension payments, and cash balance plans are a type of defined-benefit plan with individual account balances.

When an Employer Makes Pension Fund Contributions Directly to a Trustee