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Which of the following is a characteristic of a defined contribution post-employment benefit scheme?
Suggested Answer: A
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35 comments · newest first
MO
Mona
10 months ago
D is interesting, but I thought contributions were mandatory.
NI
Nikita
10 months ago
Wait, can employers really just stop contributing? Sounds risky.
GA
Gary
10 months ago
Totally agree, that's how defined contribution works!
OM
Omer
11 months ago
B is misleading; that's more of a defined benefit feature.
RA
Raymon
11 months ago
A is correct! Benefits depend on investment performance.
MI
Milly
11 months ago
D seems plausible too, but I can't recall if contributions holidays are common in defined contribution schemes. I need to think this through.
FR
Franchesca
11 months ago
I feel like C is more about defined benefit plans since they use a formula to determine benefits at retirement.
RE
Regenia
12 months ago
I'm a bit unsure about B; I remember something about employers needing to cover shortfalls, but I thought that was more typical of defined benefit schemes.
LO
Lorean
12 months ago
I think option A sounds right because in a defined contribution scheme, the benefits really do depend on investment performance.
CA
Caitlin
12 months ago
I'm leaning towards A as well, but I want to double-check the other options just to be sure I'm not missing anything.
BR
Brandon
1 year ago
I'm pretty confident that A is the right answer here. The defined contribution scheme puts the investment risk on the employees, so the benefits they receive depend on how well the investments do.
CA
Cassi
1 year ago
Okay, I've got it now. The key characteristic of a defined contribution scheme is that the benefits paid out are based on the investment performance, not a predefined formula. So A is the correct answer.
JA
Jaleesa
1 year ago
Hmm, I'm a bit confused on this one. I'll need to think it through carefully to make sure I understand the differences between the defined contribution and defined benefit schemes.
PO
Portia
1 year ago
I think the answer is A. The amount of the post-employment benefits paid to former employees depends on how well the scheme's investments have performed.
LO
Loise
1 year ago
B seems like the most logical choice to me. The employer has to step in if the funds are insufficient. I'd rather not depend on the whims of the stock market, thank you very much.
AV
Avery
1 year ago
B seems like the most logical choice to me. The employer has to step in if the funds are insufficient. I'd rather not depend on the whims of the stock market, thank you very much.
TE
Tenesha
1 year ago
B) The employer would make additional contributions into the scheme if the actuary predicted a shortfall in the funds available to pay post-employment benefits.
RA
Rashad
1 year ago
A) The amount of the post-employment benefits paid to former employees depends on how well the scheme's investments have performed.
PA
Patria
1 year ago
Ha! D is clearly the funniest option. The employer can just take a 'contributions holiday' if the assets are sufficient. Like a paid vacation, but for the company!
AV
Avery
2 years ago
C is the answer, no doubt about it. The benefits are determined by a predefined formula, not investment performance. This exam is a piece of cake!
RY
Ryann
2 years ago
That's a valid point, but I still think A) is more likely based on the characteristics of defined contribution schemes.
PE
Pete
2 years ago
I disagree, I believe the answer is C) because benefits should be predetermined.
RY
Ryann
2 years ago
I think the answer is A) because it makes sense for benefits to depend on investments.
CH
Charlene
2 years ago
Hmm, I thought option B was the right one. The employer has to cover any shortfall in the funds, not the employees. What a drag!
JA
Jamal
1 year ago
User 2: Oh, I see. I thought the employer had to cover any shortfall in the funds. Thanks for clarifying!
DE
Denny
1 year ago
User 1: I think option A is correct. The benefits depend on how well the investments perform.
GE
Gerald
2 years ago
Option A is the correct answer. The amount of benefits paid depends on the scheme's investment performance, not a predefined formula.
JU
Junita
1 year ago
Exactly, the employer's contributions are based on the scheme's investments.
JA
Jamey
1 year ago
So, the benefits are not determined by a predefined formula, but by the investment performance.
TO
Tonja
1 year ago
I agree, that's the characteristic of a defined contribution post-employment benefit scheme.
LU
Luis
1 year ago
I think the correct answer is A) The amount of the post-employment benefits paid to former employees depends on how well the scheme's investments have performed.
LO
Louvenia
1 year ago
Exactly, the employer's contributions are based on the scheme's investments.
GE
Gerald
1 year ago
So, the benefits are not determined by a predefined formula, but by the investment performance.
HO
Hoa
1 year ago
I agree, that's the characteristic of a defined contribution post-employment benefit scheme.
GW
Gwenn
1 year ago
I think the correct answer is A) The amount of the post-employment benefits paid to former employees depends on how well the scheme's investments have performed.