A pension plan that promises employees a fixed annual pension benefit, based on years of service and compensation, is called a(n)

A) defined contribution plan
B) defined benefit plan
C) unfunded plan
D) compensation plan

Question

donalea mckay · Accepted Answer

Final Answer : B, Explanation :  A defined benefit plan promises a fixed annual pension benefit to employees based on years of service and compensation. A defined contribution plan, on the other hand, defines the employer's contribution, but not the employee's benefit. An unfunded plan refers to a pension plan where the employer does not set aside funds to cover future pension payments. A compensation plan is a broader term that can refer to any type of plan that rewards employees for their performance or contribution.

A pension plan that promises employees a fixed annual pension benefit, based on years of service and compensation, is called a(n)

A) defined contribution plan
B) defined benefit plan
C) unfunded plan
D) compensation plan

Definitions

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Learning Objectives

Related questions

A pension plan that promises employees a fixed annual pension benefit, based on years of service and compensation, is called a(n) A) defined contribution planB) defined benefit planC) unfunded planD) compensation plan

Definitions

Learning Objectives

Learning Objectives

Related questions

A pension plan that promises employees a fixed annual pension benefit, based on years of service and compensation, is called a(n)

A) defined contribution plan
B) defined benefit plan
C) unfunded plan
D) compensation plan