When a company sets up a defined contribution pension plan, the __________ bears all the risk and the __________ receives all the return from the plan's assets.
A)employee; employee
B)employee; employer
C)employer; employee
D)employer; employer
E)cannot tell; depends on the economic environment.

Question

Quizplus · Accepted Answer

With a defined contribution plan, the employee bears the risk of the portfolio returns and thus risk of benefit levels.However, the employee also receives all of the returns generated by the defined contribution plan.

When a Company Sets Up a Defined Contribution Pension Plan