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 determine; depends on the economic environment.

Question

Quizplus · Accepted Answer

In a defined contribution pension plan, the employee bears all the risk related to the investment choices and the performance of those investments. Similarly, the employee receives all the return from the plan's assets, as their retirement benefits are directly tied to the contributions made and the investment performance of those contributions.

When a Company Sets Up a Defined Contribution Pension Plan