Which of the Following Is One Reason Only a Small

question 66

Multiple Choice

Which of the following is one reason only a small percentage of people belonging to occupational pension plans ever collect a full pension?

• A) Many plans have a variety of conditions that effectively prevent full payment.
• B) Most plans use vesting (using pension plan money to reinvest in the company) to keep up with inflation, but the government does not insure against bankruptcy.
• C) The majority of plans lack portability, and as workers change jobs much of their pension is lost.
• D) Most plans are indexed to private savings and investments, and pay full pensions only to the poorest recipients.

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Definitions:

Financial Decisions

Decisions made by individuals or organizations related to the allocation of resources, investment, budgeting, and managing finances.

Operating Policy

A set of guidelines or principles that dictate the operational decisions and day-to-day functioning of an organization.

Directors

Individuals elected by shareholders to oversee the management of a company, making strategic and operational decisions to ensure the company's success.

Related Party Transaction

A deal or arrangement between two parties who are joined by a special relationship prior to the deal.