The correct answer is: Employers throughout the world has migrated from defined benefit to defined contribution in recent times.
A defined benefit plan is a retirement plan in which the employer promises to pay a specified monthly benefit at retirement, usually based on the employee’s salary and years of service. A defined contribution plan is a retirement plan in which the employer and employee contribute to a fund, and the employee bears the investment risk.
In recent years, there has been a trend towards defined contribution plans, as they are less expensive for employers to administer. However, defined contribution plans also place more risk on the employee, as they may not have enough money saved to cover their retirement expenses if the market performs poorly.
Here is a brief explanation of each option:
- Defined benefit plans are retirement plans in which the employer promises to pay a specified monthly benefit at retirement, usually based on the employee’s salary and years of service. These plans are typically funded by the employer, and the employee does not bear any investment risk.
- Defined contribution plans are retirement plans in which the employer and employee contribute to a fund, and the employee bears the investment risk. These plans are typically less expensive for employers to administer than defined benefit plans, but they also place more risk on the employee.
- Both A & B is not the correct answer, as employers have not migrated from both defined benefit plans to defined contribution plans and from defined contribution plans to defined benefit plans.
- None of the above is not the correct answer, as employers have migrated from defined benefit plans to defined contribution plans in recent times.