Asked by Sarah Dinek on Jul 29, 2024
Verified
Which type of pension plan with fixed payouts is experiencing a decline in its use in Canada?
A) defined-benefit plan
B) defined-contribution plan
C) contributory plan
D) registered retirement savings plan (RRSP)
Defined-benefit Plan
A type of pension plan in which an employer promises a specified pension payment in retirement that is predetermined by a formula based on the employee's earnings history, tenure of service, and age.
Defined-contribution Plan
Defined-contribution Plan is a retirement savings plan where the amount contributed by the employer or employee is specified, but the future benefit amount is not guaranteed.
Contributory Plan
A pension plan in which contributions are made jointly by employees and employers
- Understand the various types of pension and benefit plans and their characteristics.
Verified Answer
OM
Orlando MejiaJul 31, 2024
Final Answer :
A
Explanation :
Defined-benefit plans, which promise a specific payout upon retirement, are in decline in Canada. This is because they are expensive for employers to maintain, especially with increasing life expectancies and uncertain economic conditions.
Learning Objectives
- Understand the various types of pension and benefit plans and their characteristics.