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In a defined contribution benefit plan, who assumes risk?
Suggested Answer: A
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29 comments · newest first
TA
Tammy
11 months ago
It's definitely employees, they control their own contributions.
ME
Melissa
11 months ago
Totally agree, it's all on the employees!
GE
Gertude
11 months ago
Sounds right, but I still have my doubts about how that works in practice.
AL
Alona
11 months ago
Wait, are you sure? I thought employers had some responsibility too.
BA
Basilia
11 months ago
Employees assume the risk in a defined contribution plan.
QU
Queen
12 months ago
I definitely recall that in defined contribution plans, the employees bear the investment risk.
ON
Oneida
12 months ago
I’m a bit confused; I thought the employer had some responsibility too, but maybe that’s only in defined benefit plans?
NI
Nickole
1 year ago
I remember a practice question where it mentioned that both employees and employers contribute, but the risk is mostly on the employees.
CH
Chun
1 year ago
I think the employees assume the risk in a defined contribution plan, but I'm not entirely sure.
TH
Theodora
1 year ago
I think the key here is understanding the difference between defined contribution and defined benefit plans. In a defined contribution plan, the employee bears the investment risk, not the employer.
LO
Loren
1 year ago
Okay, I remember learning about this in class. I believe the correct answer is C - both employees and employers assume risk in a defined contribution plan.
PA
Page
1 year ago
Hmm, I'm a little unsure about this one. I'll need to think it through carefully.
KI
Kiley
1 year ago
I'm pretty sure the answer is A - employees assume the risk in a defined contribution plan.
LA
Laurel
2 years ago
Yes, that's correct. Employers only contribute a fixed amount, so the investment risk falls on the employees.
KR
Kristal
2 years ago
Ha! Both of them, like a seesaw. The employees are on one end, the employers on the other. Gotta keep that balance, am I right?
AR
Arthur
2 years ago
C) Both employees and employers
CA
Carin
2 years ago
B) Employers
EL
Eliseo
2 years ago
A) Employees
EV
Eveline
2 years ago
But in a defined contribution plan, employees bear the investment risk, right?
HE
Hector
2 years ago
Definitely the employers. They're the ones who have to make the contributions and ensure the plan is properly funded.
LA
Latricia
2 years ago
Employees don't have to worry about the risk in this type of plan.
CH
Cheryl
2 years ago
That's correct. Employers are responsible for making contributions and funding the plan.
GI
Gilbert
2 years ago
Employers assume the risk in a defined contribution benefit plan.
LO
Loreen
2 years ago
The employees, of course. They're the ones who have to bear the risk of their investments in the plan.
KA
Katina
2 years ago
It's important for employees to carefully consider their investment options in these plans.
LO
Louann
2 years ago
That's right, employees assume the risk in a defined contribution benefit plan.
DE
Destiny
2 years ago
Employees
TO
Tonja
2 years ago
I disagree, I believe it's the employers who assume the risk.
EV
Eveline
2 years ago
I think employees assume the risk.