The obligation for a defined contribution plan is calculated by a) discounting the benefit the employee...
- The obligation for a defined contribution plan is calculated by
a) discounting the benefit the employee will receive at retirement.
b) add up contributions made plus interest earned less any benefits paid out.
c) the cumulative contributions made to the pension plan.
d) the amount the employer is obligated to contribute for the period.
Homework Answers
Under the defined contribution plan the employee and employer contribute to the fund equally. The amount contributed by both the parties are accumulated along with interest and any benefits paid out is deducted. The amount accumulated after necessary adjustments is paid to employees at the time of retirement.
So Option B is answer
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