Question

In: Accounting

A defined benefit plan is one in which


A defined benefit plan is one in which 

the employer promises specified payments to employees on their retirement. 

the specific provisions are defined by the Internal Revenue Code. 

the specific provisions are defined by the Uniform Code of Retirement Plans 

the employee can specify the mix of benefits (e.g., health, pension, Insurance that will be received on retirement.

Solutions

Expert Solution

A defined benefit plan is the plan in which employer gives specific retirement benefit plan to the employees by making yearly provision for the services rendered by the employees.

In the basis of above, let's analyze each option-

Option (a) Incorrect. It is not a specified payment, actual amount at the end of service period changes on account of change in compensation.

Option (b) Incorrect. IRC does not specifies a fixed amount for provision.

Option (c) Correct Retirement plans are the one as defined under uniform code of retirement plans.

Option (d) Incorrect. It only covers post employment benefit plans unlike health insurance which is during the course of employment.

On the basis of above, we can conclude that option (c) is the correct answer.


Related Solutions

this Q11) Defined benefit pension plan is a plan in which the income to received in...
this Q11) Defined benefit pension plan is a plan in which the income to received in future is known and guranteed. They provide income until your death , when in retirement. In case of Defined benefit pension plan, the investment risk is borne by the employer, so the employee need not to worry about anything. Where as Defined contribution plan is primiraly funded by employee and, employer can also contribute to a certain amount(only if he wants to invest). The...
difference between defined contribution plan and defined benefit plan
difference between defined contribution plan and defined benefit plan
1) How does a defined benefit plan differ from a defined contribution plan? Is one better...
1) How does a defined benefit plan differ from a defined contribution plan? Is one better than the other? 2)Insurance companies deal with adverse selection. Why is it a problem? Are there any current day issues that you can relate this to?
According to the textbook, the defined contribution plan and defined benefit plan are the most popular...
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 traditionally 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 this trend...
In a defined benefit plan, which item would NOT be included in the computation of Pension...
In a defined benefit plan, which item would NOT be included in the computation of Pension Expense? Select one: a. Prior Service Cost amortization b. Amortization of gain above the corridor c. Interest on the MRAV d. Service Cost
What is the difference between a Defined Benefit Pension Plan and a Defined Contribution Pension Plan.?...
What is the difference between a Defined Benefit Pension Plan and a Defined Contribution Pension Plan.? Why have Defined Contribution Plans become more popular? Froman employees perspective, which one do you think is more attractive?
(1)An employer may account for a pension plan using a defined-contribution plan or a defined- benefit...
(1)An employer may account for a pension plan using a defined-contribution plan or a defined- benefit plan: (a) In two paragraphs, please explain the difference in these plans and (b) who will bear the risk of loss under each plan. What entries (debits and credits) will be made by the employer for pension expense under a defined-contribution plan and how will the amount for pension expense be determined What entries (debits and credits) will be made by the employer for...
Differentiate between a defined contribution pension plan and a defined benefit pension plan. Explain how the...
Differentiate between a defined contribution pension plan and a defined benefit pension plan. Explain how the employer’s obligation differs between the two types of plans.
1. Money-purchase plans are what type of voluntary benefit? cash-balance plan defined-contribution pan defined benefit plan...
1. Money-purchase plans are what type of voluntary benefit? cash-balance plan defined-contribution pan defined benefit plan profit-sharing plan 2. Before Greg’s doctor’s appointment, the receptionist asks for his insurance card and asks him to sign a form that explains what the provider will do to protect him from discrimination. What law does this form outline? Family Medical Leave Act Federal Insurance Contributions Act Health Insurance Portability and Accountability Act Employee Benefits Security Administration 3. Much like forms of direct pay,...
What are the advantages and disadvantages for defined benefit pension plan and a defined contribution pension...
What are the advantages and disadvantages for defined benefit pension plan and a defined contribution pension plan each compared to the other?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT