Question

Defined Benefit Pension Plans

a.) Have separate accounts.
b.) Generally favor younger participants.
c.) Are funded entirely by the employer.
d.) Must use a unit credit formula.

Answer 1

Defined benefit pension plans are retirement plans that provide a fixed income for life after retirement. They are funded entirely by the employer and do not have separate accounts. These plans generally favor older participants.

Step-by-step explanation:

Defined benefit pension plans are retirement plans where the employer is responsible for paying a fixed amount of retirement income to the employee. They do not have separate accounts and are funded entirely by the employer. These plans generally favor older participants as they provide a guaranteed income for life after retirement. They must use a unit credit formula to calculate the benefit amount based on factors such as salary and years of service.