In a Defined-Contribution Plan

question 67

Multiple Choice

In a defined-contribution plan:

• A) only the employee makes contributions into the fund.
• B) the retirement benefits will vary with both the amount contributed and the performance of the fund.
• C) the benefits are determined mainly by years of service.
• D) no vesting is required; employees are eligible for benefits from the time they make their first contribution.

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Definitions:

Profits

Rewards earned by businesspeople who take the risks involved in blending people, technology, and information to create and market want-satisfying goods and services.

Future Periods

Time frames that lay ahead, in which planning, forecasting, and predictions are aimed towards.

Financial Managers

Executives who develop and implement the firm’s financial plan and determine the most appropriate sources and uses of funds.

Financial Plan

A comprehensive evaluation of an individual's or organization's current and future financial state by using currently known variables to predict future income, asset values, and withdrawal plans.