The Hicks Company is adopting a pension plan. Two plans are being considered. Both of the proposed pension plans are defined-benefit plans. The benefits actually paid to a given retired ex-employee who actually qualifies for benefits are to be the same for whichever of the two proposed plans is adopted.

a Who, the employee or The Hicks Company, is more likely to bear the risks and rewards of fluctuating market returns on funds invested to pay the pensions?

In each of the parts below, explain which of the two plans is likely to be less costly from the standpoint of The Hicks Company and why. If the costs are likely to be the same in both of the plans, then explain why.

b Contributory plan or noncontributory plan.

c Plan with benefits fully vested in 5 years or plan with benefits fully vested in 10 years.

d Fully funded plan or partially funded plan.

e Plan that amortizes prior-service costs over 20 years or plan that amortizes prior-service costs over 30 years.