Most pension plans are now viewed as providing deferred income that employees accumulate during their working life and that belongs to them after a specified number of years of service. Which of the following is this view based on?

Question

Quizplus · Accepted Answer

The view that pension plans provide deferred income that belongs to employees after a specified number of years of service is based on an earnings philosophy, where pension benefits are seen as an earned part of an employee's compensation package. This philosophy has become increasingly popular in recent years, as employers have moved away from pay-as-you-go pension systems and towards defined benefit and defined contribution plans. Provincial law may play a role in regulating pension plans, but it is not the basis for this particular view. A reward philosophy may be relevant to the design of a pension plan, but it does not capture the idea that pension benefits are earned by employees.

Most Pension Plans Are Now Viewed as Providing Deferred Income