My brother-in-law worked as a full-time school teacher in San Diego for 35 years. When he completed his 35 years of service, he retired and now receives - - based on his salary and years of service - - $6,000 per month for the rest of his life. This type of employer-sponsored retirement plan is best described with which of the following phrases:

(A) Fixed compensation

(B) Defined benefit

(C) Perpetual benefit

(D) Contingent benefit

(E) Defined contribution

Question

Business

Ellen Donovan

12 July, 12:00

My brother-in-law worked as a full-time school teacher in San Diego for 35 years. When he completed his 35 years of service, he retired and now receives - - based on his salary and years of service - - $6,000 per month for the rest of his life. This type of employer-sponsored retirement plan is best described with which of the following phrases:

(A) Fixed compensation

(B) Defined benefit

(C) Perpetual benefit

(D) Contingent benefit

(E) Defined contribution

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Answers (1)

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Nikhil Diaz · Answer 1

Answer: (B) Defined benefit

Explanation:

Defined benefit is referred to as the type of the pension plan under which the employer tends to agrees to pay the particular pension amount after the retirement. The amount of the pension is thus driven by the annual earnings of the individuals i. e. the employee during their period of working. This is also referred to as the no. of years they have served the office.