In a defined contribution pension plan,
A)the government pays employees a fixed pension amount upon retirement.
B)the government pays employees a variable pension amount upon retirement.
C)the employer makes annual contributions into a fund belonging to employees and the retirement benefit depends on the amount in the fund at retirement.
D)the employer guarantees the employee a specific amount of retirement pay based on the pay earned during the final years of employment and the numbers of years of service.
E)the SEC pays employees a fixed pension amount upon retirement.

Question

Quizplus · Accepted Answer

In a defined contribution pension plan, the employer makes annual contributions into a fund belonging to employees, and the retirement benefit depends on the amount in the fund at the time of retirement. This means that the employee bears the investment risk, and the pension amount is uncertain until retirement.

In a Defined Contribution Pension Plan