PART A: MANDATORY ESSAY QUESTIONS (10 Points Each – 30 Points Total): Please tho
ID: 447093 • Letter: P
Question
PART A: MANDATORY ESSAY QUESTIONS (10 Points Each – 30 Points Total):
Please thoroughly explain the defined benefit pension plan design. Describe employee and employer obligations, entitlements, and contribution issues, administration structures, risk burden, etc. Be specific.
Please thoroughly explain the defined contribution pension plan design. Describe employee and employer obligations, entitlements and contribution issues, administration structures, risk burden, etc. Be specific.
Time off with pay is important to all employees in today’s workplace. Please discuss the various “time off with pay” benefit options offered by companies today. Please include discussion and examples on all arrangements, including but not limited to: sick time, vacation time, jury duty, funeral time, etc. Discuss the options and various plan designs of each. Please discuss the PTO (paid time off) concept and design. How does it work? What is / can be included and why include / not include? Describe the different designs, options and how this benefit is delivered.
heres the text book address: https://www.ebri.org/pdf/publications/books/fundamentals/2009/06_DB-DC_RETIREMENT_Funds_2009_EBRI.pdf
Explanation / Answer
Defined Benefit Pension Plan
This is a type of pension plan where the employers provide a specific amount to the employees on monthly basis after retirement. The amount given to the employees depends on the position or job description of the individual in the organization, his salary, tenure in the organization etc. Such benefit pension plans are provided in the government organizations or in public sector organizations.
Employee and employer obligations: The employer as well as the employee has equal obligations or responsibilities in such pension plans. Moreover the employers have to make more investment than employees.
Entitlements, and contribution issues: The entitlement of the defined benefit pension plan the entitlement is performed based on the service of the employee for the employer, his salary etc. Some of such plans also entitle the social security benefits of the employees. In such plans the employee and the employer both have the contribution and the employer faces the maximum investment risks.
Administration structures: As per the structure of the defined benefit pension plan it focuses on the benefits which the employee receives at end of his service in the organization. The claim of the employee after retirement is considered as the deferred nominal life annuity limited through certain limits of the Pension Benefit Guarantee Corporation.
Risk burden: Some of the risk burden which these policies can face includes the sensitiveness of the benefits gained by the employees due to the inflations, the flexibility of the funding and the rules and regulations changed by the government.
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