Which of the following variables offers the most likely explanation for the decrease in popularity of "defined benefit plans" by employers in Canada?
A) They provided poor returns on pension plan investments, and longevity of employees increased.
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

Poor returns on pension plan investments, coupled with increased longevity of employees, likely resulted in higher costs for employers to maintain defined benefit plans. This would make defined contribution plans a more attractive option because they shift the investment risk onto the employees.

Which of the Following Variables Offers the Most Likely Explanation