An employee enrolls in a pension plan that will pay out 3% of the employee's average salary for the last 3 years for each year of service that the employee worked. What type of pension plan does the employee have?

Question

Quizplus · Accepted Answer

A defined benefit plan is one in which the plan is required to pay out a certain level of benefit based on a formula. The benefit is paid out regardless of the amount available in the plan.

An Employee Enrolls in a Pension Plan That Will Pay