Question

Which of the following issues are characteristic of defined benefit plans? (Check all that apply.)

a) Guaranteed Income
b) Employee Investment Control
c) Employer Bears Investment Risk
d) Individual Accounts

Answer 1

Defined benefit plans are retirement plans where the employer guarantees a certain income to the employee upon retirement and bears the investment risk. Employee investment control and individual accounts are not characteristic of defined benefit plans.

Step-by-step explanation:

Defined benefit plans are retirement plans where the employer guarantees a certain income to the employee upon retirement. This is one of the characteristic features of defined benefit plans.

In defined benefit plans, the employer bears the investment risk and is responsible for ensuring that the retirement benefits are funded adequately to meet the promised obligations.

Employee investment control and individual accounts are not characteristic of defined benefit plans. In defined benefit plans, the employer manages the investments and the employee does not have control over the investment decisions.