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Which of the following statements accurately describe the basic provisions of a target benefit plan? I....

Which of the following statements accurately describe the basic provisions of a target benefit plan?

I. Participants bear the risk of investment results.
II. The amount of the retirement benefit is specified in the plan, and the employer is required to provide a specific terminal benefit.
III. The contributions are limited to the lesser of 100% of compensation or $54,000 (2017 limit).
IV. Like other defined contribution plans, target benefit plans generally are more favorable for younger participants.

Group of answer choices

II and IV only

II, III, and IV only

I, II, and III only

I and III only

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Answer #1

Answer:

Target benefit plans are the plans used by the employers to accumulate sum for their employees. Risk of investment always remains with the employers. The limit for contribution in Target Banefit plan was increased by $1,000 in 2017 to $54,000. The amount of retirement benefits in Target benefit plans are specified in the plan and more beneficial for younger participants.

So correct answer is Option B.

II , III, & IV Only.

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