Which Statement Explains the Risk Involved in "Defined Benefit Plans

question 21

Multiple Choice

Which statement explains the risk involved in "defined benefit plans"?

• A)The plan places investment risk on employees since the future benefits are pre-specified.
• B)The plan sponsor never needs to increase its contributions to the pension trust.
• C)The plan may require the employee to pay $200 per month for each year of service.
• D)The plan specifies the eventual outflows from the pension trust to future retirees.

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Definitions:

Termination

The process of ending an employee's contract or employment with an organization, possibly due to various reasons such as redundancy or misconduct.

Involuntary Dismissal

The forced termination of an employee's contract by the employer, often due to poor performance, misconduct, or organizational restructuring.

Resignation

The formal act of giving up or quitting one's office or position, often accompanied by a written notice.

Affirmative Action

Policies or measures that favor groups known to have been discriminated against in the past.