Question

Which of the following plans requires actuarial analysis only at inception?

a.) Target Benefit Pension Plan
b.) Cash Balance Pension Plan
c.) Defined Benefit Pension Plan
d.) Money Purchase Pension Plan

Answer 1

The Cash Balance Pension Plan requires actuarial analysis only at inception.

Step-by-step explanation:

The plan that requires actuarial analysis only at inception is option b) Cash Balance Pension Plan. Cash balance plans are a type of defined benefit plan, which means the employer contributes a fixed amount or a percentage of the employee's salary into the account. The money within the plan is invested, and the employee is guaranteed a specific account balance at retirement.