In Companies That Provide Defined Benefit Plans, If the Funding

question 35

True/False

In companies that provide defined benefit plans, if the funding is inadequate to pay the benefits promised, the employees must make up the shortfall.

---

Definitions:

Future Value Factor

A multiplier used to calculate the future value of an investment based on its present value and interest rate over time.

Annuities

are financial products that provide a stream of payments over time, often used as part of retirement planning.

Perpetuity

A financial instrument that provides a stream of infinite cash flows or payments that continue indefinitely.