Explanation:
The correct answer is C.
The plan sponsor is the entity that establishes the pension plan. This could be an employer or a labor union. The plan sponsor is responsible for setting up the plan, deciding on the benefits it will provide, and ensuring that it complies with all relevant laws and regulations. They are also responsible for the financial risk associated with the plan. This includes the risk that the plan's investments will not perform as expected, and the risk that the plan will not have enough money to pay all promised benefits. In the event of a shortfall, the plan sponsor may be required to make additional contributions to the plan. Therefore, the ultimate responsibility for the pension fund rests with the plan sponsor.
Choice A is incorrect. While employees contribute to the pension fund, they are not responsible for its management or ultimate accountability. Their role is primarily to provide the funds that will be invested and managed by others.
Choice B is incorrect. The fund manager oversees the investments of the pension fund, but they do not hold ultimate responsibility for it. They are tasked with making investment decisions in line with the objectives of the pension plan, but accountability lies with those who establish and maintain these objectives.
Choice D is incorrect. There must be an entity held accountable for a pension fund's operation and growth; it cannot be 'none of the above'. In this case, it's established that this responsibility falls on the plan sponsor.
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Q.2493 The ultimate responsibility for the pension fund rests with:
A
Employees
B
The fund manager
C
The plan sponsor
D
None of the above