Which of the Following Statements Is True About the Pension

question 71

Multiple Choice

Which of the following statements is true about the Pension Benefit Guaranty Corporation (PBGC) ?

• A)It was created by the Consolidated Omnibus Budget Reconciliation Act (COBRA)of 1985.
• B)It provides a complete benefit replacement.
• C)It guarantees healthcare benefits.
• D)It is funded by a monthly contribution from each plan participant.
• E)It does not allow payouts to be adjusted for cost-of-living changes.

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Definitions:

Break-Even

The instance where cumulative spending equals cumulative earnings, causing neither a financial gain nor a deficit.

Variable Costs

Costs that vary directly with the level of production or output.

Fixed Costs

Fixed expenses that are unaffected by the amount of goods produced or sold, for example, rent, salaries, and insurance payments.

Profit

Profit is the financial gain obtained when the amount earned from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.