Final answer:
The correct option is: a.) True. Contributions to SIMPLE plans predominantly consist of employer contributions. Employers are required to make contributions to their employees' retirement accounts in a SIMPLE plan.
Step-by-step explanation:
Contributions to SIMPLE plans predominantly consist of employer contributions. In a SIMPLE (Savings Incentive Match Plan for Employees) plan, employers are required to make contributions to their employees' retirement accounts. These contributions are usually based on a percentage of the employee's salary, and they are typically fully vested immediately.
However, employees are also allowed to contribute to their own accounts, although these employee contributions are generally optional and not required like the employer contributions.
The funds are invested in a range of vehicles and are tax-deferred. These plans are also portable, which means they can be transferred if an employee changes jobs, providing flexibility and a hedge against inflation-related losses that can affect traditional pension plans.