JKL Company just converted its traditional defined-benefit plan to ano

JKL Company just converted its traditional defined-benefit plan to another type of plan.

Under the plan, benefits are defined in terms of a hypothetical account balance, with retirement benefits dependent upon the value of the participant’s account at retirement. Each year, employees receive an interest rate credit and a pay credit which is a specified percentage of compensation. This type of plan is called a
A) section 401(k) plan.
B) deposit-administration plan.
C) cash-balance plan.
D) trust fund plan.

ANSWER

Answer: C