Which of the following is true of retirement plans? A.Noncontributory plans are

Question

Which of the following is true of retirement plans?

A.Noncontributory plans are contributed to by employees.

B.Defined-contribution plans penalize employees for changing jobs.

C.In cash balance plans, all contributions are made by employers.

D.Defined-benefit plans are associated with greater employee turnover.

E.The contributions to a 401(k) plan are taxed as income as soon as they are invested.

2.Which type of plan is intended to provide health coverage in a way that gets employees involved as consumers making decisions to lower costs?

A.preferred provider organization (PPO)

B.flexible spending account

C.health maintenance organization (HMO)

D.Managed care

E.consumer-driven health plans (CDHP)

Explanation / Answer

(1) The answer is option C. In cash balance plans, all contributions are made by employers.

Explanation:

Some of the Retirement plans are Contributory Plan, Noncontributory Plan, Defined-Benefit Plan, Defined-Contribution Plan, and Cash balance plans. In Cash balance plans(CBP), all contributions are made by employers is TRUE among all options because employers assume the risk of investment gain or loss and CBP are most generous to young employees whereas defined-benefit plans are generous to older employees who are having many years of service and noncontributory plans are contributed by employers without any contribution of employees. Out of these entire retirement plans, defined-contribution plan is mostly preferred by the employers because it doesn’t limit the benefits such as based on age and years of service as compared to defined-benefit plans and cash balance plans.

(2) The Answer is option D. Managed Care

Explanation:

Among the various options, Managed care is the one that intends to provide health coverage in a way that gets employees involved as consumers making decisions to lower costs. Other options viz., Health Maintenance Organization (HMO) plans, Preferred Provider Organization (PPO) plans, Exclusive Provider Organization (EPO) plans, Point of Service (POS) plans, and Consumer-driven health plans (CDHP) provides varieties of service. However, the one that collectively involves consumer and employee making the decision to lower costs is Managed Care.

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