In a Contributory Defined Contribution Pension Plan,all of the Following

question 94

Multiple Choice

In a contributory defined contribution pension plan,all of the following are true with the exception of

• A)a separate account is established for each participant.
• B)both the employee and employer can make contributions to the plan.
• C)amounts are contributed to the plan based upon a specific formula.
• D)retirement benefits are a fixed amount based on the level of compensation earned by the employee during the working years.

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Definitions:

Social Security

A government program that provides financial assistance to retirees, disabled individuals, and their dependents.

Cyclically Balanced

A fiscal policy strategy where government budgets are planned to balance over the business cycle, running surpluses in boom years and deficits during recessions.

Federal Deficits

The financial shortfall that occurs when a government's expenditures exceed its revenues in a given fiscal year.