Which of the following statements regarding defined benefit plans is false?
A) Employees bear the investment risks of the plan.
B) Employers are generally required to make annual contributions to meet expected future liabilities.
C) The benefits are based on a fixed formula.
D) The vesting period can be based on a graded or cliff schedule.

Question

Quizplus · Accepted Answer

The statement "Employees bear the investment risks of the plan" is false. In a defined benefit plan, the employer is responsible for investing the funds in order to meet future benefit obligations. If the investments do not perform as expected, the employer is still responsible for paying the promised benefits to employees.

Which of the Following Statements Regarding Defined Benefit Plans Is