Which of the Following Statements About Pension Plans If Any

question 8

Multiple Choice

Which of the following statements about pension plans if any, is Incorrect?

• A) A defined contribution plan is, in effect, a savings plan that is funded by employers, although many plans also permit additional contributions by employees.
• B) Under a defined benefit plan, the employer agrees to give retirees a specifically defined benefit, such as $500 per month or 50 percent of the employee's final salary.
• C) A portable pension plan is one that an employee can carry from one employer to another.
• D) An employer's obligation is satisfied under a defined contribution plan when it makes the required contributions to the plan. The risk of inadequate investment returns is borne by the employee.
• E) If assets exceed the present value of benefits, the pension plan is fully funded.

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Definitions:

Financing

The process of providing funds for business activities, making purchases, or investing.

Management Consultant

is a professional advisor who helps organizations improve their performance, primarily through the analysis of existing organizational problems and the development of plans for improvement.

Financial Condition

The status of an entity's finances, encapsulating its assets, liabilities, equity, and overall financial health and stability.

Tax Planning

The process of analyzing a financial plan or situation with the goal of ensuring tax efficiency.