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Back to pension and employee benefits law
Question 1 of 20
Under the Employee Retirement Income Security Act of 1974 (ERISA), which of the following best describes the primary distinction between a 'Defined Benefit' (DB) plan and a 'Defined Contribution' (DC) plan regarding investment risk?
A.
In a DB plan, the employee bears the investment risk; in a DC plan, the employer bears the risk.
B.
In a DB plan, the employer bears the investment risk; in a DC plan, the employee bears the risk.
C.
In both DB and DC plans, the Pension Benefit Guaranty Corporation (PBGC) bears the investment risk.
D.
Investment risk is shared equally between employer and employee in both plan types by law.
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