Final answer:
A cash balance plan, which is a hybrid of a defined benefit and a defined contribution scheme, earns interest at a predetermined rate often comparable to that of U.S. Treasury bills, with contributions mainly made by employers. Other given statements about cash balance plans are not accurate.
Step-by-step explanation:
The question at hand asks about the properties of a cash balance plan, which is a type of retirement savings plan. Based on the given options, the correct statement is that the money in a cash balance plan earns interest at a predetermined rate which can often be compared to the rate paid on U.S. Treasury bills.
Cash balance plans are a type of defined benefit plan that functions similarly to pensions but with some characteristics of defined contribution plans like 401(k)s. Contributions are typically made by the employer, and sometimes by employees, and the plan promises a set retirement benefit to employees based on a formula. This benefit often includes interest credits, which is where option B is true. Unlike traditional pension plans, cash balance plans provide individual accounts for each participant, making it easier to understand potential retirement benefits.
Regarding options A, C, D, and E: Contributions are usually employer-funded (A is false), younger workers can benefit significantly since credits accumulate over time (C is false), these plans do not specifically penalize employees for changing jobs (D is false), and the potential benefits are more predictable than in defined contribution plans (E is false). Thus, the mention of the correct option in this final answer is that option B is true for a cash balance plan.