Asked by Denia Drake on Jun 17, 2024
Verified
U.S.tax laws encourage companies to overfund their pension plans.
U.S. Tax Laws
The body of laws governing federal, state, and local taxation in the United States, affecting individuals, businesses, corporations, and other entities.
- Comprehend the influence of U.S. tax laws on pension plan funding.
Verified Answer
AV
Arianna VizcainoJun 19, 2024
Final Answer :
True
Explanation :
The U.S. tax laws provide incentives for companies to overfund their pension plans, which allows them to receive tax deductions for contributions made to the plan and to accumulate tax-free earnings in the plan. Additionally, overfunding the pension plan can also serve as a form of corporate finance, allowing the company to invest excess funds in the plan and earn higher returns than they would otherwise be able to through traditional investment vehicles.
Learning Objectives
- Comprehend the influence of U.S. tax laws on pension plan funding.
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