Which Statement Correctly Identifies a Benefit or a Drawback of a Company

question 88

Multiple Choice

Which statement correctly identifies a benefit or a drawback of a company offering its employees a pension plan compared to a retirement savings program with some employer matching of savings?

• A) A company's obligation to an employee's retirement savings plan is met completely by the time the employee retires. A company maintains an annual obligation to an employee's pension until the former employee dies.
• B) A company's obligation to an employee's pension is met completely by the time the employee retires. A company maintains an annual obligation to an employee's retirement savings plan until the former employee dies.
• C) Pensions typically increase annually with cost-of-living-adjustments (COLAs), while the payout of a retirement savings plan will never have an annual increase.
• D) A company can delay its costs for retirement savings until an employee retires, but it must make annual contributions to a pension fund during an employee's working years.

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Definitions:

Poverty Incidence

The frequency or rate at which individuals or households fall below the poverty line, measuring the spread of poverty in a population.

African Americans

A racial or ethnic group in the United States with ancestry from the black racial groups of Africa.

Implicit Marginal Tax Rates

The effective rate of taxation on an individual’s additional income from work or other sources, taking into account the loss of benefits or tax deductions as income increases.

Income Transfer Programs

Government initiatives designed to redistribute money from certain groups of individuals to others, typically from the wealthier segments of society to those in need, to reduce economic inequality.