Question

Explain the features of a defined contribution pension plan

Explain the features of a defined contribution pension plan

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Defined Contribution Pension Plan or DCP is a plan which is used by organisations and companies in which they contribute a fixed amount of money at regular intervals as a part of compensation structure of the employees, the plan is basically aimed to help develop a habit of savings, investment and develop a retirement corpus for the employees. DCP differs from Defined Benefit Obligation (DBO) by the fact that in case of DBO, it is the obligation of the employer to provide a pre determined amount on retirement whereas in DCP there is no such obligation on employer, he is mainly required to deposit a fixed amount of contribution at every interval, the resulting gain or loss is to be borne by the employees and not by the employer like in a DCP.

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
"Pension Plans" According to the textbook, the defined contribution plan and defined benefit plan are the...
"Pension Plans" According to the textbook, the defined contribution plan and defined benefit plan are the most popular pension plans used by employers. Employers have changed from traditional defined benefit plans to defined contribution plans with no major company establishing a traditional pension plan in the past decade. Differentiate between the defined contribution pension plan and the defined benefit plan. What are the major differences in accounting for defined contribution plans and defined benefit plans? Assess the most likely reasons...
Defined benefit pension plan vs defined contribution plan which one is not true? A. Defined contribution...
Defined benefit pension plan vs defined contribution plan which one is not true? A. Defined contribution plan cant be overfunded/underfunded B. Defined benefit plans have separate statements, and a defined contribution plan does not have separate financial statements C.None of above .
Should a company that offers employees a pension plan have a “Defined Contribution Plan” or a...
Should a company that offers employees a pension plan have a “Defined Contribution Plan” or a “Defined Benefit Plan?” Explain the differences and what impact each plan type have on the company
what is a defined benefits pension plan, defined contribution plan and 401k accounts. Do you have...
what is a defined benefits pension plan, defined contribution plan and 401k accounts. Do you have a preference for one of these? why?
What is the difference between defined benefit and defined contribution pension plans? Identify the plan that...
What is the difference between defined benefit and defined contribution pension plans? Identify the plan that provides the greater amount of risk for the spouse receiving benefits (assuming continued existence of the plan).
What is the maximum deductible contribution to a defined contribution qualified pension plan on behalf of...
What is the maximum deductible contribution to a defined contribution qualified pension plan on behalf of Ann, a self-employed individual whose income from self-employment is $25,000 and whose Social Security taxes are $3,532 in 2016?
Which of the following is true about a defined contribution pension plan? a) the employer bears...
Which of the following is true about a defined contribution pension plan? a) the employer bears the investment risks of the pension plan; b) the employee bears the investment risks of the pension plan; c) the employer must ensure there are sufficient assets in the plan; d) the employee must ensure there are sufficient liabilities in the plan; e) the employer must report the funded status to the public of the plans of all employees.
1) The interest component included in pension expense for a defined-benefit pension plan represents the Select...
1) The interest component included in pension expense for a defined-benefit pension plan represents the Select one: shortage between the expected and actual returns on plan assets. increase in the projected benefit obligation due to the passage of time. increase in the fair value of plan assets due to the passage of time. amortization of the discount on accumulated OCI (PSC). 2) Frank has accepted a new job which gives him the choice between a defined-benefit and a defined contribution...
1.The accounting for defined contribution pension plans is easier (than the accounting for defined benefit plans)...
1.The accounting for defined contribution pension plans is easier (than the accounting for defined benefit plans) because for defined contribution plans each year: Group of answer choices The employer records expense equal to the amount paid out to retirees The employer records expense based on an amount provided by the actuary The employer records expense equal to the annual contribution paid by the employer into the plan The employer records expense based on the earnings of the plan assets 2.The...
Your organization currently has a defined contribution pension plan with employees contributing up to 3% with...
Your organization currently has a defined contribution pension plan with employees contributing up to 3% with a company match. Effective with the first pay of the new year, new employees will no longer be enrolled in that plan. Instead, they will be enrolled in the new Group Registered Retirement Savings Plan (RRSP) with the same contribution options. In your own words, explain the difference in the T4 information slip reporting for these two groups of employees.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT