Malcolm is interviewing for a new job and he is evaluating the quality of the pension plans offered for each company he is considering. One company offers a pension plan in which the company will make all contributions to the plan and will base his pension benefit on a formula linked to his pay at the time of retirement and the number of years he was with the firm. This pension plan could be classified as .
A)qualified, defined benefit
B)non-contributory, defined benefit
C)contributory, qualified
D)contributory, defined benefit
E)non-contributory, defined contribution

Question

Quizplus · Accepted Answer

The plan is non-contributory because the company makes all contributions, and it is a defined benefit plan because the pension benefit is based on a formula linked to pay and years of service.

Malcolm Is Interviewing for a New Job and He Is