An example of a type of plan where the amount the employee receives at retirement is dependent on investment performance is a:

Question

Quizplus · Accepted Answer

In a defined contribution plan, the amount contributed to the employee's account is predetermined, but the amount the employee receives at retirement depends on the investment performance of the account. This is different from a defined benefit plan, where the employee is guaranteed a specific benefit amount at retirement regardless of investment performance. A cash balance plan is a hybrid plan that combines features of both defined contribution and defined benefit plans but still guarantees a specific benefit amount at retirement. Therefore, the correct answer is A) defined contribution plan.

An Example of a Type of Plan Where the Amount