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NEW QUESTION: 1
Which type of voluntary benefit program utilizes a typical pension plan in which the employer adds an established benefit to the plan when the employee retires?
A. Defined benefit
B. Nonqualified plan
C. Qualified plan
D. Benefit accrual plan
E. Defined contribution
Answer: A
Explanation:
Explanation: This question describes the defined benefit program, which starts with a basic pension plan. To this pension plan are added established benefits, thus explaining the name of the plan. Answer choice A is incorrect because the benefit accrual plan is not a type of voluntary benefits plan. Answer choice B is incorrect. Like the defined benefit plan, the defined contribution plan utilizes a standard pension plan but without the added benefits defined in advance. Answer choice C is incorrect because the nonqualified plan provides benefits to specified employees (for example, executives) and shareholders. And answer choice E is incorrect because a qualified plan is a 401(k) plan that receives special tax credits from the IRS.