Many defined benefit pension plans have a target rate of return on investment ____________.

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Defined benefit pension plans typically have an assumed actuarial rate of return that is used to calculate the plan's funding status and required contributions. This rate is usually based on the long-term expected returns of the plan's investments, such as stocks and bonds. Setting a target rate of return that is too high can cause the plan to be underfunded, while setting a rate that is too low can result in excess contributions and potentially hurt the sponsor's bottom line. Therefore, the assumed actuarial rate of return is a commonly used benchmark for target returns on investment for defined benefit pension plans.

Many Defined Benefit Pension Plans Have a Target Rate of Return