Question

In: Accounting

Which of the following is a characteristic of pension plans that does not apply to profit...

Which of the following is a characteristic of pension plans that does not apply to profit sharing plans?

a. Separate accounts.

b. In-service withdrawals for select employees, plan permitting.

c. Limited investment in life insurance.

d. Mandatory funding.

Solutions

Expert Solution

Solution:

Mandatory funding  is a characteristic of pension plans that does not apply to profit sharing plans because, in profit sharing plan contribution is made by employer on the basis of Firm's profit.

Hence option d is correct.


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