Question

11 which of the following retirement plans are paid for by the employer and individualized by the employee?

defined contribution plans
profit sharing plans
defined benefit plans
designated benefit plans

Explanation:

Analyze the question requirements

The question asks to identify which retirement plan is funded (paid for) by the employer and individualized by the employee.

Evaluate the options

• Defined contribution plans: These are typically funded by both the employee and employer (e.g., 401k), or primarily by the employee with optional employer matching.
• Profit sharing plans: Using the Profit Sharing Plans knowledge point, these are retirement plans funded entirely by employer contributions (paid for by the employer) based on company profits, and accounts are individualized for each employee.
• Defined benefit plans: These are traditional pensions funded by the employer, but they are not individualized investment accounts managed or directed by the employee; benefits are based on a formula.
• Designated benefit plans: This is not a standard term for these types of retirement plans.

Determine the correct plan

Profit sharing plans fit the definition of being fully funded by the employer while maintaining individual accounts for each employee.

Answer:

• Defined contribution plans
• Profit sharing plans (Correct answer)
• Defined benefit plans
• Designated benefit plans