Recommendations & StrategiesQuestion 60 of 110
Which retirement plan feature is characteristic of a defined benefit plan?
a.The employee bears all investment risk
b.Account balances depend solely on contributions and investment returns
c.The employer promises a specified retirement benefit, often based on salary and years of service
d.Contributions are always made only by the employee
Explanation
A defined benefit plan promises participants a specified retirement benefit, commonly calculated from salary history and years of service, and the employer bears the investment and funding risk. A defined contribution plan, by contrast, ties the ultimate benefit to contributions and investment performance, shifting risk to the employee.
Practice all 110 questions free — no signup required.
Related questions on this topic
- Alpha in portfolio performance measurement represents which of the following?
- A client wants current income and capital preservation with low risk. Which allocation is most suitable?
- An investment adviser recommending a strategy must ensure it is suitable. Which action best supports suitability?
- A step-up in cost basis at death generally means which of the following for inherited appreciated securities?
- An efficient frontier graph plots portfolios according to which two dimensions?
- A client in a high tax bracket seeking tax-advantaged income would most likely benefit from which of the following?
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against NASAA Series 65 Investment Adviser Law Exam · How we review