In the context of a manufacturing company's board of directors conducting an evaluation of the firm's defined benefit pension plan, which of the following statements most accurately describes the funding risk linked to this plan?

Exam-Like

Decreases in interest rates always reduce funding risk.

9.1%

Funding risk represents the true long-term risk to the plan sponsor.

60.2%

Funding risk is effectively transferred to the employees of the manufacturing company.

12.5%

As the time horizon for expected payouts gets longer, the plan's funding risk decreases.

18.2%

Financial Risk Manager Part 2