Which statement is true regarding a defined benefit pension plan? A. A defined b

Question

Which statement is true regarding a defined benefit pension plan?  

A. A defined benefit plan defines the annual amount of cash that an employer must deposit to fulfill its pension obligation to employees.

B.No investment risk is borne by an employer.

C.At the end of the reporting period, an employer can measure exactly the total amount of pension benefits that it is responsible for providing to employees in the future.

D.The benefits to be paid to employees depend on events that are beyond the employer’s control.

Explanation / Answer

The correct option is D.) The benefits to be paid to employees depend on events that are beyond the employer's control. This statement is true regarding a defined benefit pension plan. All other statements are false. For example, under defined benefit plans investment risk is borne by employer.

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