As a result of a recent human resource audit,it was determined that a particular company has an "underfund liability" associated with its retirement plan,requiring an immediate injection of cash.What type of pension plan or retirement plan is this company likely using?

Question

Quizplus · Accepted Answer

The underfunded liability is typically associated with defined benefit plans, where the employer bears the investment risk and commits to pay a set benefit to employees upon retirement. If the investments do not perform as expected, the employer may need to make additional contributions to the plan to ensure it can meet its obligations. Hybrid flexible plans may have a similar feature, but they are a relatively rare type of retirement plan, and it is not clear from the information provided whether the company has such a plan. RRSPs are a type of individual retirement account that does not involve an employer's obligation to fund it. Mandatory retirement plans are prohibited in many jurisdictions, and the information provided does not suggest that this company has such a plan.

As a Result of a Recent Human Resource Audit,it Was