overfunded pensions
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Who is entitled to overfunded pension assets, the retirees or the company? Please answer the following question. Include a reference in the solution.
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Solution Summary
This solution describes who owns funds of overfunded pensions. Concepts discussed include pension plans, 401(K) plans, benefit plan, contribution plan, allocation and market forces. The explanation is given in 363 words.
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Problem: Who is entitled to overfunded pension assets, the retirees or the company?
Solution:
Pension plans are a form of "defined benefit plan" as opposed to a "defined contribution plan". What that ultimately means is that the plan participant is to recieve a defined amount for a defined length of time. For comparative purposes, a 401(K) is a defined contribution plan. The participant defines How much is contributed into the plan usually how it is allocated in investment choices. The allocation and market forces then determine the amount available for distribution to the employee. Another ...
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