_____ plans are more favorable to long-term than to short-term employees.
A) 401 K
B) Cash balance
C) Profit sharing
D) Traditional defined benefit

Question

Quizplus · Accepted Answer

Traditional defined benefit plans are designed to provide retirement benefits based on a formula that takes into account an employee's salary and years of service. This means that employees who work for a company for a longer period of time are more likely to receive larger benefits from these plans than short-term employees. In contrast, cash balance and profit sharing plans generally allocate contributions on a more equal basis to all participants, regardless of their length of service. While 401(k) plans do offer long-term investment options, they are also more flexible and accessible to all employees regardless of tenure. Therefore, traditional defined benefit plans are the most advantageous for long-term employees looking for a retirement benefit plan.

_____ Plans Are More Favorable to Long-Term Than to Short-Term