Which of the Following Statements About Defined Contribution Plans Is

question 6

Multiple Choice

Which of the following statements about defined contribution plans is incorrect?

• A) In general, employees can choose the investment vehicle under a defined contribution plan.Thus, highly risk-averse employees can choose low-risk investments, while more risk-tolerant employees can choose high-risk investments.
• B) In a defined contribution plan, the employer must make larger-than-average contributions to the pension plan when investment returns have been below expectations.
• C) Defined benefit plans are used more often by large corporations than by small companies.
• D) The PBGC insures a portion of pension benefits.
• E) A defined contribution plan places the risk of poor pension portfolio performance on the employee.

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Formal

Characterized by strict or meticulous adherence to established rules or standards, often in language, dress, or behavior.

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Tone

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