As Social Security slants benefits in favor of lower-paid workers, the Internal Revenue Code permits employers to adjust pension contributions so that the overall contributions (pension plus Social Security) are nondiscriminatory.
This adjustment permits employers to increase pension contributions for highly-compensated employees. Adjusting contributions to consider Social Security contributions is called
A) prorating.
B) indexing.
C) offset.
D) integration.
Question 2
For a long-term employee who is covered by a defined benefit plan, the highest retirement income will be obtained if his/her retirement income is based on
A) initial average pay.
B) random year annual pay.
C) career-average pay.
D) final average pay.
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