which one of the following is a basic provision of cash balance pension plan? A.

Question

which one of the following is a basic provision of cash balance pension plan?

A. As an individual account plan, the investment risk of performance is borne by the employee.

B The employer will typically guarantee a minimum investment return in the form of an interest credit.

C. The plan tends to favor older employees by establishing a cash balance amount that may be higher than that otherwise available.

D. As a defined contribution pension plan, the plan benefits are guaranteed by the PBGC up to a specified amount.

Explanation / Answer

Cash balance pension plan is a defined-benefit plan, unlike the regular defined-benefit plan, the cash balance plan is maintained on an individual account basis, much like a defined-contribution plan.

Hence, Option (D) is correct answer.

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