Asked by Katie Lucas on Jul 05, 2024
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Evan is the human resource manager of a one-year-old technology company. The founder wants him to set up a retirement plan. Evan thinks the best approach during the company's early years would be a defined-contribution plan funded with profit-sharing dollars. Which statement best supports Evan's idea?
A) The plan makes employees part-owners of the company.
B) The Pension Benefit Guarantee Corporation will guarantee a basic benefit.
C) Employees can buy an annuity with the contributions when they retire.
D) The amount employees contribute is not taxed when they contribute it.
E) Contributing a share of profits gives the company more flexibility as it establishes itself.
Defined-Contribution Plan
A retirement plan where the amount of the employer's annual contribution is specified, and the future benefits fluctuate based on investment performance.
Profit-Sharing
A system where a portion of a company's profits is distributed to its employees, typically as a form of incentive or bonus.
Pension Benefit Guarantee Corporation
A U.S. government agency that protects the retirement incomes of American workers by insuring defined-benefit pension plans.
- Discern the pivotal role of retirement plans in shaping long-term occupational associations.
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Learning Objectives
- Discern the pivotal role of retirement plans in shaping long-term occupational associations.
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