The retirement plan that promises to pay a specific benefit to its beneficiaries is
A) A defined contribution plan.
B) A defined benefit pension plan.
C) A non-contribution pension plan.
D) An actuarial pension plan.
E) Choices a and c.

Question

Quizplus · Accepted Answer

A defined benefit pension plan is the retirement plan that promises to pay a specific benefit to its beneficiaries, usually based on factors such as years of employment, salary history, and age. The employer bears the responsibility for funding the plan and assumes the investment risk for ensuring that there are sufficient funds to meet the plan's obligations.

The Retirement Plan That Promises to Pay a Specific Benefit