Question

A pension plan that requires the employer to make annual pension contributions, with no promise to employees regarding future pension payments, is termed:______. a. defined benefit.b. funded. c. defined contribution.d. un-funded.

Answer 1

Defined Contribution

Step-by-step explanation:

Retirement plans that re employer sponsored are broken into two categories. The first is called the defined- contribution plan while the second is known as defined-benefit plan. The main difference is that defined contribution seeks the cooperation of both the employer and employee to invest and contribute towards retirement while defined benefits is a guarantee of a specified amount in retirement for the employee

Defined Contribution

This retirement package requires an employee to make an investment of a fixed amount from his/her salary to his retirement plan while the employer is also expected to either match the amount contributed by the employee or promise a monthly/annual contribution of a particular percentage to the retirement package. This way the employer makes no promise of future pension but commits to a regular contribution