SIE Exam Question 756: Answer and Explanation

Question: 756

All but which of the following are characteristics of defined benefit plans?

• A. Employer contributions vary.
• B. Participant benefits vary.
• C. The employer assumes the investment risk.
• D. They favor older employees.

Correct Answer: B

Explanation:

In a defined benefit plan, employer contributions can vary but participant benefits are fixed. The employer assumes the investment risk, and they tend to favor older employees.