Which of the following is true of defined benefit retirement plans?
A) The investment risk is borne by the employee.
B) The amount of benefit paid at retirement is pre-determined.
C) They are most common in private sector and nonunionized workforces.
D) They typically do not guarantee benefits.

Question

Quizplus · Accepted Answer

Defined benefit retirement plans are designed to provide a pre-determined amount of benefit to employees at retirement, based on factors such as years of service and salary levels. The investment risk and responsibility for funding these plans typically falls on the employer, not the employee. Defined benefit plans are more common among public sector and unionized workforces. Additionally, these plans usually guarantee benefits, meaning the employer is required to pay out the promised benefit to retirees.

Which of the Following Is True of Defined Benefit Retirement