35. In a defined-benefit plan, a formula is used that defines the contribution the employer is to make; no promise is made concerning the ultimate benefits to be paid out to the employees. requires that the benefit of gain or the risk of loss from the assets contributed to the pension plan be borne by the employee. defines the benefits that the employee will receive at the time of retirement. requires that pension expense and the cash funding amount be the same.
35. In a defined-benefit plan, a formula is used that defines the contribution the employer is to make; no promise is made concerning the ultimate benefits to be paid out to the employees. requires that the benefit of gain or the risk of loss from the assets contributed to the pension plan be borne by the employee. defines the benefits that the employee will receive at the time of retirement. requires that pension expense and the cash funding amount be the same.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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35.
In a defined-benefit plan, a formula is used that
defines the contribution the employer is to make; no promise is made concerning the ultimate benefits to be paid out to the employees.
requires that the benefit of gain or the risk of loss from the assets contributed to the pension plan be borne by the employee.
defines the benefits that the employee will receive at the time of retirement.
requires that pension expense and the cash funding amount be the same.
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defined-benefit plan
defined-benefit plan is a plan where the benefit to be derived by the employee after the retirement is defined
In this plan the risk and responsibility of the fund is with employer as employee gets a defined benefit at retirement
defined-contribution plan
defined-contribution plan is a plan in which the contribution to be made by the employer is defined but the benefit to be received is not defined
In this plan the risk and responsibility of the fund is with employee
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