A Company That Has Been Providing Generous Defined Benefit Pension

question 1

Multiple Choice

A company that has been providing generous defined benefit pension plans to all its retirees for the past 50 years is now facing bankruptcy and is unable to pay the pension amount. Which of the following statements is true in the given scenario?

• A) The Pension Benefit Guaranty Corporation will pay the company's retiree benefits from its solvency fund.
• B) The Pension Benefit Guaranty Corporation will reduce the pension amount based on the available amount of money in the pension fund.
• C) The retirees will have to forfeit their pension benefits.
• D) The company can suspend pension payments until the pension fund is fully recovered.

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Definitions:

Less Pleasant

A term that could describe a job or task seen as undesirable or lower in terms of comfort and enjoyment.

Marginal Productivity Theory

An economic theory stating that the amount of pay or wages a worker receives is directly related to their contribution to the output or productivity.

Income Disparities

The uneven distribution of income within a population, often leading to social and economic inequality.

Median Earnings

The middle value of earnings in a group, where half earn more and half earn less, often used as a standard of comparison.