Erin knows exactly what benefits she will receive when she retires.She has worked for the organization for 20 years and will receive 65 percent of the average of her two highest years of pay.Erin's retirement plan is a ________ plan.

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Quizplus · Accepted Answer

Erin's retirement plan is a defined benefit plan, which promises a specific payout amount upon retirement based on factors such as years of service and salary history. The fact that she knows exactly what benefits she will receive indicates that she is in a defined benefit plan rather than a defined contribution plan, which does not guarantee a specific payout amount. Vesting refers to the point at which an employee becomes entitled to employer contributions to a retirement plan, and experience is not a relevant term in this context.

Erin Knows Exactly What Benefits She Will Receive When She