Which of the following is true about defined contribution plans?
A)They shift the investment risk to the employer.
B)They present greater administrative challenges to employers.
C)They promise a specific benefit level for employees upon retirement.
D)They are preferred more in smaller companies than larger ones.
E)They have become less common.

Question

Quizplus · Accepted Answer

Defined contribution plans are generally more favored by smaller companies due to their scalability and lower administrative burden compared to defined benefit plans. These plans, such as 401(k)s, allow employees to contribute a portion of their wages to individual accounts, with or without employer matching, making them more manageable for smaller entities.

Which of the Following Is True About Defined Contribution Plans