In an agent pension plan, which statement is true?

In an agent pension plan, each government maintains a separate account. This setup is designed to ensure that individual government entities can track their contributions and manage their specific pension obligations effectively. By having separate accounts, each government can tailor its investment strategy, contribution levels, and benefit payouts according to its unique circumstances and needs, allowing for more precise financial management.

This structure contrasts with other types of pension plans, such as a cost-sharing plan, where pooled resources may be used to pay benefits for all participants. The separation in accounts helps provide transparency and accountability in managing funds for the individual governments involved. Also, it allows each entity to specifically evaluate its financial health and pension liabilities without relying on the performance or decisions of others.