When a Company Sets Up a Defined Contribution Pension Plan

question 39

Multiple Choice

When a company sets up a defined contribution pension plan, the __________ bears all the risk and the __________ receives all the return from the plan's assets.

• A)employee; employee
• B)employee; employer
• C)employer; employee
• D)employer; employer
• E)cannot tell; depends on the economic environment.

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Definitions:

Total Expenses

The aggregate amount of all costs incurred by a business during a specific period.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, providing a more useful tool for performance evaluation.

Employee Salaries And Wages

Refers to the total payments made to employees for the work they have done, inclusive of overtime, bonuses, and other compensations.

Flexible Budget

A budget that adjusts or flexes for changes in the volume of activity, providing a more useful tool for performance evaluation than a static budget.