Which one of the following is not a typical characteristic of a defined contribution plan?

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A guaranteed formula-based benefit is not a typical characteristic of a defined contribution plan. This feature is more commonly found in defined benefit plans where the employer bears the investment risk. In contrast, defined contribution plans such as 401(k) plans, typically do not guarantee a set benefit amount, but rather provide employees with the ability to save for retirement through their own contributions and any matching employer contributions. The plan balance can be transferred to an IRA, and the investments are typically managed by the employee with the option to take lump-sum withdrawals.

Which One of the Following Is Not a Typical Characteristic