Adanac Corp. has a Defined Benefit Pension Plan (DBPP) and they are considering converting their plan to a Defined Contribution Pension Plan (DCPP). Why would Adanac Corp. convert from a DBPP to a DCPP?

a) so they will not be responsible for the obligations set out in the capital accumulation plan (CAP) guidelines

b) so the sponsor contributions are a tax-deductible expense and are not a taxable benefit to the plan members

c) so they will not be responsible if a shortfall in pension income occurs or the impact of longevity of members on the plan

d) so the plan members will not have choices to make when they are enrolled and all investment decisions will be made by the sponsor

Answer rating: 100% (QA)

The most likely reason Adanac Corp would convert from a DBPP to a DCPP is c so they will ... View the full answer