If an employee selects a pension plan in which a fixed percentage of profit is allocated to each employee in proportion to his/her proportion of total employee pay in that employee group,which pension plan did he/she select?
A) Defined benefit
B) Salary reduction
C) 403(b)
D) Defined contribution

Question

Quizplus · Accepted Answer

The employee selected a defined contribution pension plan where a fixed percentage of profit is allocated to each employee based on his/her proportion of total employee pay in that employee group. This type of plan is also referred to as a profit-sharing plan. In a defined contribution plan, the employee bears the investment risk, and the benefit at retirement depends on the amount of contributions and the investment returns earned on those contributions.

If an Employee Selects a Pension Plan in Which a Fixed