Which of the following statements about defined contribution plans, if any, is i

Question

Which of the following statements about defined contribution plans, if any, is incorrect? A. A defined contribution plan places the risk of poor pension portfolio performance on the employee. B. In general, employees can choose the investment vehicle under a defined contribution plan. Thus, highly risk-averse employees can choose low-risk investments, while more risk-tolerant employees can choose high-risk investments. C. In a defined contribution plan, the employer must make larger-than-average contributions to the pension plan when investment returns have been below expectations. D. Large corporations tend to use defined benefit plans, while small corporations tend to use defined contribution plans E. All of the above statements are correct.

Explanation / Answer

c. In a defined contribution plan, the employer must make larger-thanaverage contributions to the pension plan when investment returns have been below expectations.-correct answer

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