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.

Individual Income Taxes
43rd Edition
ISBN:9780357109731
Author:Hoffman
Publisher:Hoffman
Chapter19: Deferred Compensation
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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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