Which of the following statements is true regarding a defined benefit pension plan?
A. Defined benefit plans are relatively easy to handle from an accounting perspective.
B. Employers that use defined benefit plans are assuming more risks than employers that use defined contribution plans.
C. Defined benefit plans require an employer to contribute a defined sum each period to a pension fund.
D. A defined benefit plan requires the employer to fund the plan each year for an amount equal to the pension expense.
Answer: B
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