Question

8.which of the following is a characteristic of a cash balance plan?

a. contributions are based on age at entry.

b.There is higher investment risk.

c. Accounts are set up for each participant.

d.Ultimate benefits are not guaranteed.

9.The amount of benefit a participant is entitled to receive on termination of employment prior to retirement is determined by

a.plan vesting provisions.

b.benefit accrual rules.

c.service year calculations.

d.the career-average formula.

Answer 1

Ques 8

Answer should be

c. Accounts are set up for each participant.

Because Government setup a separate account for each employee.

Que 9

Answer should be

b. benefit accrual rules.

Because employees will get all the benefit if an employee is terminated before average age of retirement.