Question

what type of employer - sponsored retirement plans limit the investment risk of employers by requiring the employee to manage contributed funds until retirement?

• defined benefit plans
• defined contribution plans

Explanation:

To solve this, we analyze the two types of retirement plans:

• Defined benefit plans: The employer is responsible for managing investments and providing a fixed benefit at retirement, so they bear the investment risk.
• Defined contribution plans: The employee manages the contributed funds (e.g., 401(k) where employees choose investments), so the employer's investment risk is limited as the employee handles the funds until retirement.

Answer:

B. defined contribution plans