Which benefit is funded by both the employee and the employer on a matching basis for retirement income?

• A. FMLA
• B. Unemployment Insurance
• C. Social Security
• D. Workers' Compensation

Answer: (C)

The idea being tested is how retirement income is funded. Social Security is financed through payroll taxes that are split between workers and their employers. When you earn wages, a portion goes to Social Security (and Medicare) through FICA taxes, and your employer contributes the same amount. These matching contributions fund retirement benefits, along with disability and survivors benefits, making it a true shared-cost program for retirement income.

The other options don’t involve retirement funding funded by both employee and employer. FMLA is a leave policy and not funded retirement benefits. Unemployment insurance is largely funded by employer payroll taxes (not by employees contributing to retirement). Workers’ compensation is financed through employer-paid premiums.