Question

Which of the following is a type of pension plan where the employer agrees to pay a specified benefit to the employee upon retirement, based on a set formula?

A Defined benefit plan Correct Answer Incorrect Answer
B Defined contribution plan Correct Answer Incorrect Answer
C Hybrid plan Correct Answer Incorrect Answer
D Target benefit plan Correct Answer Incorrect Answer
E None of the above Correct Answer Incorrect Answer

Solution

A defined benefit plan is a type of pension plan where the employer agrees to pay a specified benefit to the employee upon retirement, based on a set formula. This formula typically takes into account the employee's length of service, salary history, and other factors.

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