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.
Chapter19: Deferred Compensation
Section: Chapter Questions
Problem 2DQ
Related questions
Question
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.
Expert Solution
Step 1
solution
concept
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
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
Pfin (with Mindtap, 1 Term Printed Access Card) (…
Finance
ISBN:
9780357033609
Author:
Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:
Cengage Learning