Final answer:
False. Employer (and employee, if applicable) contributions to public employee retirement systems should not be based on actuarial computations. Public employee retirement systems are typically based on defined contribution plans, such as 401(k)s and 403(b)s.
Step-by-step explanation:
False. Employer (and employee, if applicable) contributions to public employee retirement systems should not be based on actuarial computations.
Public employee retirement systems are typically based on defined contribution plans, such as 401(k)s and 403(b)s. In these plans, both the employer and the employee make fixed contributions to the worker's retirement account on a regular basis. The investments made with these funds generate real rates of return, and the retirement benefits are not burdened by inflation costs. Actuarial computations are primarily used in defined benefit plans, where the employer guarantees a specific pension amount to the employee based on factors such as salary and years of service.