A pension plan in which retirement benefits are based on an accumulation of annual company contributions (as a percentage of the employee's pay)plus interest credited each year is called a ____ plan.

Question

Quizplus · Accepted Answer

A cash balance plan is a type of defined-contribution plan in which the employer contributes a fixed amount of money to each employee's individual account each year, and the account earns interest based on a predetermined rate. The retirement benefits are based on the accumulated balance in the account at the time of retirement.

A Pension Plan in Which Retirement Benefits Are Based on an Accumulation