Question

The annual maximum Québec Pension Plan Contribution is not required to be prorated when an employee:

A) Joins mid-year
B) Leaves mid-year
C) Works part-time
D) Works full-time

Answer 1

The annual maximum Québec Pension Plan Contribution does not need to be prorated for employees who work full-time. Defined contribution plans like 401(k)s and 403(b)s are replacing traditional pensions, offering portability and the potential for real rates of return.

Step-by-step explanation:

The annual maximum Québec Pension Plan Contribution is not required to be prorated when an employee works full-time. Pensions and other defined benefits retirement plans are becoming less common, with defined contribution plans such as 401(k)s and 403(b)s taking their place. In these modern retirement accounts, the employer contributes a fixed amount to the worker's retirement account on a regular basis, which is usually every paycheck. The contributions are tax-deferred, and the accounts are portable, meaning they can be transferred to a new employer if the individual changes jobs. Investments made in these plans have the potential to generate real rates of return, shielding retirees from the impact of inflation that traditional pensioners might face.