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4. Underfunded private defined benefit pensions Suppose future payment obligations upon an employee's retirement could be predicted accurately. The higher the expected future return on
4. Underfunded private defined benefit pensions Suppose future payment obligations upon an employee's retirement could be predicted accurately. The higher the expected future return on the money set aside for employees, the the amount of funds that must be invested today to satisfy future payments. money to the pension fund. It also has cash that it An employer can lower its expenses and increase its earnings by allocating can use for other purposes. What does the Pension Protection Act of 2006 require of a company? O Companies with defined-benefit pension plans must invest only in assets that bring no less than 10% return per year. O All companies must periodically determine whether their pension funds are underfunded to set aside additional money, if needed. O Companies with sufficiently funded defined-benefit pension plans must decrease their contributions to the plan. O Companies with underfunded defined-benefit pension plans must increase employees' salaries every five years
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