A pension plan which requires the employer to make annual pension contributions, with no promise to employees regarding future pension payments, is termed
A) funded
B) unfunded
C) defined benefit
D) defined contribution

Question

Quizplus · Accepted Answer

A pension plan that requires the employer to make annual pension contributions, with no promise to employees regarding future pension payments, is a defined contribution plan. In this type of plan, the employer's contribution obligations are "defined" but the future benefit payments are not. This is different from a defined benefit plan, where the employer promises specific retirement benefits to employees based on their years of service and salary history. Funded and unfunded refer to the way the plan is financed, with funded plans having assets set aside to pay future benefits and unfunded plans financing benefits as they become due.

A Pension Plan Which Requires the Employer to Make Annual