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There Are Several Fundamental Differences Between Defined-Benefit Plans and Defined-Contribution

Question 33

Multiple Choice

There are several fundamental differences between defined-benefit plans and defined-contribution plans. In the defined-benefit plan, the plan sponsor does which of the following?


A) The sponsor does not guarantee the retirement benefit
B) The sponsor does not make the investment choices
C) The sponsor bears the investment risk if the investments earn enough to fund the guaranteed retirement benefits.
D) The sponsor bears the investment risk if the investments do not earn enough to fund the guaranteed retirement benefits.

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