Author Question: Rita went to work for a manufacturing company. The company offers a defined-benefit pension plan. ... (Read 146 times)

jazziefee · **on:** Jul 11, 2018

Rita went to work for a manufacturing company. The company offers a defined-benefit pension plan.

The retirement benefit is equal to 1.5 percent multiplied by years of service with the company, and the result is multiplied by average salary in the three highest consecutive years of paid employment with the company. The benefit formula used at Rita's company is a
A) flat dollar amount for all employees.
B) flat percentage of annual earnings.
C) flat dollar amount for each year of service.
D) unit-benefit formula.

Question 2

Which of the following statements is (are) true with respect to vesting under a qualified retirement plan?

I. Vesting helps to reduce labor turnover.
II. An employee who terminates employment after four years of service has no vested retirement benefit under cliff vesting.
A) I only
B) II only
C) both I and II
D) neither I nor II