In: Accounting
Question 1 In a defined contribution pension plan, the retirement benefits to the employee are not defined.
True or False
Question 2 Saved Employees are not allowed to make contributions to a defined contribution pension plan.
True or False
Question 3 Current service cost is usually the largest single component of pension expense under a defined benefit pension plan.
True or False
Question 4 In a defined contribution plan, employers run the risk of high pension contributions.
True or False
Question 5 An increase in current service cost would cause an increase in pension obligations.
True or False
Question 6 The payment of pension benefits to retirees would result in an increase in pension plan obligations.
True or False
Question 7 When pension plan assets exceed pension plan obligations, the plan is said to be in a overfunded position.
True or False
Question 8 The difference between the pension plan assets at fair value and the defined benefit obligation is referred to as the net defined benefit element to be reported on the statement of financial position.
True or False
Question 9 An overfunded status in a defined pension benefit plan means that there is a cash shortage in the plan.
True or False
Sorry for editing answer as incomplete answer got submitted due to techical issues.
1.This statement is true as defined contribution pension plan allows employees to contribute a fixed amount or fixed
percentage of their pay checks to an account for retirement . The amount of contribution that employee will get is not fixed as the amount of employees contribution and also the return on amount the plan will earn on investments is not fixed .
2. any employee can contribute to defined contribution plan . thus this statement is false
3. true , under defined pension plan it depended on lot of factors as employee age, its maximum salary drawn during his service period and maximum years served in organisation. thus service cost is the major component
4. False , in a defined contribution plan , employees run the risk of high pension contribution as the return which they will get depend on the income earned by investments
5 true, amount ot pension obligation depends on age, length of his term in a company and cost his services . thus if cost of service increase employers contibution has to increase and thus burden will increase
6.False, payment of pension benefits to employees will have no increase in pension plan obligation as employer pays a fixed sum every month onbasis of salary, age and employment years of employees. After retirement employess get benefit from fund house
7.An overfunded position is when pension house has more assets as compared to liabilities. Thus it is true that pension plan exceed pension obligation
8.True, the difference between pension plan assets at fair value and defined benefit obligation is net defined benefit
9. false, an overfunded status means that company has already saved more than what its obligations are.