Which statement best explains the reason for the decrease in popularity of "defined benefit plans" by employers in Canada?
A) There has been increased longevity of employees.
B) Defined benefit plans are simply not popular among employees.
C) They help organizations plan more accurately; hence,they make it easier to fund these liabilities.
D) Employers believe defined contribution plans are much more unpredictable from a funding perspective.

Question

Quizplus · Accepted Answer

Defined benefit plans promise a specific payout at retirement, which becomes more costly for employers as people live longer. This increased longevity means employers must fund these pensions for a longer period, making them less popular among employers due to the higher financial burden.

Which Statement Best Explains the Reason for the Decrease in Popularity