Retirement benefits are primarily an effective employee retention tool because they:

Question

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Retirement benefits typically increase in value over time, as employees accrue more years of service with a firm. This can serve as a powerful retention tool, as employees who have invested many years in a company may be reluctant to leave and forfeit their retirement benefits. Option A is incorrect because while retirement benefits can offer tax savings to employers, this is not the primary reason why they are an effective retention tool. Option B is incorrect because retirement benefits do not necessarily decrease in value when an employee job-hops, depending on the vesting schedule and other factors. Option D is not necessarily true for all retirement benefits, as some plans may not offer early retirement options.

Retirement Benefits Are Primarily an Effective Employee Retention Tool Because