Asked by Charlene Wright on May 19, 2024
Verified
Tessy, a senior accountant at a private bank in Massachusetts, retired at the age of 62. Upon retirement, she received a benefit amount from the bank. This benefit amount equaled the total sum of money she had added to her pension plan each year plus the amount that the bank added to it every year. In this scenario, the sum of money that Tessy received post retirement comes from the _____.
A) Workers' Compensation Insurance Program
B) defined contribution plan
C) cafeteria-style benefits plan
D) Social Security program
Defined Contribution Plan
A retirement plan in which the amount of the employer's annual contribution is specified.
Workers' Compensation Insurance Program
A mandatory insurance program that provides benefits to employees who suffer job-related injuries or illnesses, covering medical care, wage replacement, and rehabilitation.
Pension Plan
A retirement plan that requires an employer to make contributions into a pool of funds set aside for a worker's future benefit. The fund is invested on the employee's behalf, and the earnings on the investments generate income to the worker upon retirement.
- Gain insight into the legal privileges pertinent to pensions and the operation of workers' compensation.
Verified Answer
MB
Mackenzie BrownMay 25, 2024
Final Answer :
B
Explanation :
The sum of money Tessy received post-retirement, which includes contributions from both her and her employer, is characteristic of a defined contribution plan. This type of retirement plan is funded by contributions from the employee, the employer, or both, and the retirement benefit is based on the amount contributed and the performance of the investments.
Learning Objectives
- Gain insight into the legal privileges pertinent to pensions and the operation of workers' compensation.