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:

Compound

A substance formed from two or more elements chemically bonded together in a fixed ratio.

3-nitrophthalic Acid

An aromatic dicarboxylic acid compound with a nitro group substituted at the 3-position on the benzene ring.

Pentanedioic Acid

An organic compound also known as glutaric acid, with the formula C5H8O4, characterized by two carboxylic acid groups at each end of a five-carbon chain.

Trans-1,3-cyclohexanedicarboxylic Acid

A type of dicarboxylic acid where the carboxyl groups are located on the first and third carbon atoms of a cyclohexane ring, in a trans configuration.