Which of the following describes defined benefit pension plans?

Question

Quizplus · Accepted Answer

Defined benefit pension plans provide retirement benefits based on the plan benefit formula, which typically takes into account factors such as an employee's years of service and compensation history. This can result in a more predictable retirement income for employees, but can also present accounting challenges for employers. Options A and C are incorrect as defined benefit plans can raise accounting and administrative issues, and they are not necessarily easy to construct. Option B describes a defined contribution plan, not a defined benefit plan.

Which of the Following Describes Defined Benefit Pension Plans