Question
Under the defined contribution plan, the amount of
pension on retirement is dependent upon which of the following factors?Solution
A Pension plan be either a defined benefit plan or a defined contribution plan. A defined contribution plan is one in which the pension depends on the contributions made and the return generated on the investment made of those contributions. In this plan, the contribution made for the pension fund is defined or fixed. For example NPS or EPF where a fixed amount is contributed every month from the salary.
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