A statewide pension plan exists for all local governments in a certain state.The provisions of the plan indicate that each qualifying retiree receive 2% multiplied by the number of years active employment multiplied by the average salary for the past four years of service.The government calculates the actuarial liability on a statewide basis,not by individual government.The plan would be known as a (an):

Question

Quizplus · Accepted Answer

The plan described in the question is a multiple-employer plan (since it covers all local governments in the state), a defined benefit plan (since it specifies the benefit formula), and a cost-sharing plan (since actuarial liability is calculated on a statewide basis). Therefore, the correct choice is C, multiple-employer, defined benefit, cost-sharing plan. None of the other choices fit the description of the plan.

A Statewide Pension Plan Exists for All Local Governments in a Certain