Question

Defined benefits plans and cash balance plans are both pension plans. However, they are significantly different...

Defined benefits plans and cash balance plans are both pension plans. However, they are significantly different plans. Which of the following statements is true?

a. A cash balance pension plan benefits younger and older employees equally.

b. Both plans have hypothetical accounts for each plan participant.

c. Both plan use the same vesting schedules whether the plan is top heavy or not.

d. Both plans can provide for lump-sum benefits upon termination and/or full retirement age.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Ans is d. Both plans can provide for lump-sum benefits upon termination and/or full retirement age.

explanation: defined benefit plan usually expresses benefit in form of monthly income but a lump sum can also be provided same way cash balance plan pays lump sum either retirement or termination.

Statement A is False, since establishment of cash balance plan is more beneficial for younger employees, since formula is based on year of service and pay.

Statement B is false, since defined benefit plan promises a defined benefit to the participant after retirement and no contribution is required into the plan if plan earning is sufficient for funding.

Statement c is false, since defined benefit plan consider the age factor but cash balance plan not.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Matching Questions 1. A traditional pension plan in which you receive a promised payout at retirement....
Matching Questions 1. A traditional pension plan in which you receive a promised payout at retirement. 2. A retirement plan in which the employer provides all of the funding and employees do NOT put their own money into the plan.    3. A type of retirement plan where both the employee and employer can/do put money into the plan. 4. A retirement plan provision that allows you to take your account balance with you if you leave your current employer...
a Straight Defined Benefit Plans, a Target Benefit Plans, an ESOP, a SIMPLE, a SEP, a...
a Straight Defined Benefit Plans, a Target Benefit Plans, an ESOP, a SIMPLE, a SEP, a 401(k), a 403(b), a Profit Sharing Plan, or a Money Purchase Pension Plan. An optometrist has a private practice in a medium-sized town. They specialize in unique eyewear. They are the only place within 75 miles where a consumer can find Lacoste and Gucci frames. This doctor is doing well for himself. He has decided that he wants to provide a retirement benefit for...
Titan Corporation has a defined benefit pension plan. One of its employees has vested benefits under...
Titan Corporation has a defined benefit pension plan. One of its employees has vested benefits under the plan, which will pay her $49,000 annually for life starting with the first $49,000 payment on the day she retires at the age of 65. The employee has just reached the age of 45. Titan consulted standard mortality tables to come up with a life expectancy of 80 for this employee. The implicit interest rate under the plan is 9%. (FV of $1,...
Clark Industries has a defined benefit pension plan that specifies annual, year-end retirement benefits equal to:...
Clark Industries has a defined benefit pension plan that specifies annual, year-end retirement benefits equal to: 1.2% × Service years × Final year’s salary Stanley Mills was hired by Clark at the beginning of 2002. Mills is expected to retire at the end of 2046 after 45 years of service. His retirement is expected to span 15 years. At the end of 2021, 20 years after being hired, his salary is $92,000. The company’s actuary projects Mills’s salary to be...
Clark Industries has a defined benefit pension plan that specifies annual, year-end retirement benefits equal to:...
Clark Industries has a defined benefit pension plan that specifies annual, year-end retirement benefits equal to: 1.4% × Service years × Final year’s salary Stanley Mills was hired by Clark at the beginning of 2002. Mills is expected to retire at the end of 2046 after 45 years of service. His retirement is expected to span 15 years. At the end of 2021, 20 years after being hired, his salary is $89,000. The company’s actuary projects Mills’s salary to be...
Question 1 (1 point) Ray died this year at age 73, and his wife, Mary, age...
Question 1 (1 point) Ray died this year at age 73, and his wife, Mary, age 55, is the designated beneficiary on his Roth IRA. Ray's Roth IRA was established 3 years ago. Which of the following statements is(are) CORRECT? I Ray was not subject to required minimum distributions from his Roth IRA during his lifetime. II If Mary chooses to distribute the entire balance of the Roth IRA this year, the distribution may be subject to both regular income...
Subject: Human Resource Management Main question: Which benefit plans would you choose, and which wouldn't you...
Subject: Human Resource Management Main question: Which benefit plans would you choose, and which wouldn't you choose and give reasons why you would or would not want a benefit that were used in making the benefit selections (specially at at entry level making $30000). PROCEDURES: Assume that you recently graduated from college and are just starting a new job at a large firm. You will be receiving a starting net pay (net of all taxes and mandatory deductions) of $30,000....
In 2020, Chip, an accomplished professional race car driver, is to receive a signing bonus for...
In 2020, Chip, an accomplished professional race car driver, is to receive a signing bonus for agreeing to drive for Hot-Lap International, a racing team. Hot-Lap agrees to establish a NQDC agreement with Chip to defer the bonus beyond Chip’s peak income producing years. Hot-Lap transfers the bonuses to an escrow agent, subject to the risk of forfeiture to team creditors in bankruptcy, who invests the funds in securities acting as a hedge against inflation. The bonus is deferred until...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary rivals? How will the acquisition of Reebok by Adidas impact the structure of the athletic shoe industry? Is this likely to be favorable or unfavorable for New Balance? 2- What issues does New Balance management need to address? 3-What recommendations would you make to New Balance Management? What does New Balance need to do to continue to be successful? Should management continue to invest...
Using the model proposed by Lafley and Charan, analyze how Apigee was able to drive innovation....
Using the model proposed by Lafley and Charan, analyze how Apigee was able to drive innovation. case:    W17400 APIGEE: PEOPLE MANAGEMENT PRACTICES AND THE CHALLENGE OF GROWTH Ranjeet Nambudiri, S. Ramnarayan, and Catherine Xavier wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT