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Megatherium Industries Had a Generous Defined-Benefit Pension Plan for Retirees

Question 64

Multiple Choice

Megatherium Industries had a generous defined-benefit pension plan for retirees for the last 50 years.Now,because of declines in the stock market,the investments in the pension plan are not generating enough revenue to fund the plan.Which of the following statement is TRUE?


A) Megatherium will probably have to make up the shortfall in the pension fund.
B) Megatherium must decrease the amount of pension payments to retirees to the level that is financially-sound based on the amount of money in the pension fund.
C) The federal government will step in and make up the shortfall as long as there has been no malfeasance on the part of the company.
D) Megatherium can suspend pension payments until the pension fund has recovered.

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