Which of the following statements is not true relating to a defined contribution pension plan?
A)A defined contribution plan defines the contributions of the company to the pension plan.
B)Once the defined contribution is paid,the company has no further obligation to the pension plan.
C)This type of plan shifts the risk to the employee as to whether the pension plan will grow to provide for a reasonable pension payment upon retirement.
D)There is no problem estimating the company's pension expense.
E)This type of plan presents substantial problems in estimating the pension liability.

Question

Quizplus · Accepted Answer

Defined contribution plans specify the amount the employer contributes to the plan, not the benefits the employee will receive upon retirement. This makes estimating the pension liability straightforward, as the liability is essentially the contributions made by the employer. Therefore, statement E is not true because it incorrectly suggests that estimating pension liability in a defined contribution plan presents substantial problems.

Which of the Following Statements Is Not True Relating to a Defined