A number of assumptions about future events must be made regarding a defined benefit plan.Which of the following does not represent one of the assumptions?
A)Interest rates
B)Termination date for the firm
C)Employee turnover
D)Mortality rates
E)Compensation

Question

Quizplus · Accepted Answer

The termination date for the firm is not an assumption about future events in a defined benefit plan, as the plan would typically continue until all obligations to current and future retirees have been met, regardless of the firm's termination date. The other options listed (interest rates, employee turnover, mortality rates, and compensation) are all important assumptions that must be considered when designing and funding a defined benefit plan.

A Number of Assumptions About Future Events Must Be Made