This Type of Hybrid Plan Defines Benefits for Each Employee

question 17

Multiple Choice

This type of hybrid plan defines benefits for each employee by reference to the amount of the employee's hypothetical account balance.(Cash Balance Plans and Pension Equity Plans)

• A)Money purchase plan
• B)Target benefit plan
• C)Cash balance plan
• D)Pension equity plan

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Definitions:

Using Sinking Fund

The practice of setting aside money over time into a separate account to repay debt or replace a major asset in the future, thus avoiding a large lump-sum expense.

Market Value

Market value is the amount for which something can be sold in a given market at a particular time.

Redemption Value

The price per share a corporation pays to redeem or retire capital stock.

Preferred Stock

Class of capital stock that has preference to a corporation’s profits and assets.