Future Business Leaders of America (FBLA) Business Law Practice Exam

What does a pension plan provide to employees after they retire?

1. Provision of insurance benefits

2. A lump sum payment

3. Income to support them financially

4. A continuation of health benefits

The correct answer is: Income to support them financially

A pension plan primarily provides employees with a source of income after they retire, which is aimed at supporting them financially in their post-employment years. This income is typically based on factors like salary history and length of service, ensuring that retirees have a stable stream of payments over time. While some pension plans can offer additional benefits such as a lump sum payment or health benefits, the core function of a pension plan is to ensure that the retiree has regular income to cover living expenses. Other options, such as insurance benefits or continuation of health benefits, while important, are not the primary focus of a pension plan. The primary goal is to support retirees financially, making option C the most accurate choice.