Which of the following is not a characteristic of a defined-contribution pension plan?
A) The employer's contribution each period is based on a formula.
B) The benefits to be received by employees are usually determined by an employee's three highest years of salary.
C) The accounting for a defined-contribution plan is straightforward and uncomplicated.
D) The benefit of gain or the risk of loss from the assets contributed to the pension fund are borne by the employee.

Question

Quizplus · Accepted Answer

In a defined-contribution pension plan, the benefits received by employees depend on the contributions made and the performance of the investment options chosen, not on an employee's salary levels. Option B describes a characteristic of a defined-benefit pension plan, where benefits are often based on factors like years of service and salary.

Which of the Following Is Not a Characteristic of a Defined-Contribution