Which of the following pensions does not promise employees a specific retirement benefit?

Question

Quizplus · Accepted Answer

Defined-contribution plans, such as 401(k)s, do not promise employees a specific retirement benefit. Instead, the employer contributes a set amount to the employee's retirement account, and the employee is responsible for investing and managing the funds. The retirement benefit ultimately depends on the performance of the investments. Defined-benefit plans, on the other hand, promise employees a specific retirement benefit calculated based on factors such as years of service and salary. Overfunded and underfunded plans refer to the funding status of a defined-benefit plan, not the type of plan.

Which of the Following Pensions Does Not Promise Employees a Specific