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A requirement of traditional pension plans is that an

Expert replies
by BTGmoderatorDC » Mon Jun 25, 2018 4:35 pm

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Difficulty—

A requirement of traditional pension plans is that an employee work for a company a number of years before gaining full rights to benefits from the company's plan on retirement. Companies used this requirement to help them retain employees, but recent regulations have substantially reduced the number of years of work a company can require.
Nevertheless, companies have not experienced any significant loss of employees.

Which of the following, if true, helps to explain why companies are not experiencing problems in retaining employees?

(A) As the number of years an employee has worked for a company increases, the rate at which the company contributes to the employee's pension benefits increases.
(B) Potential employees prefer to work for companies that offer them pension plans rather than for those that do not.
(C) Most companies that do not offer traditional pension plans offer plans in which their employees enjoy rights to retirement benefits as soon as they enter employment.
(D) An employee is more willing to leave an employer after gaining full rights to pension benefits than before gaining such rights.
(E) Employers have always been reluctant to lose highly trained employees.
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Source: — Critical Reasoning |

by deloitte247 » Tue Jun 26, 2018 1:26 pm
In Option A - CORRECT.
This option most explain why companies don't experience any significant loose of employees. Since the determinate of an employees pension plan is the number of years spent with his employers, then they take advantage of it by using the traditional pension plans to retain their employees.

In Option B - INCORRECT.
This statement is true but, most employers too are in search of loyal employees who can endure the traditional numbers of years required before an employee can be entitled to pension.

In Option C - INCORRECT.
Retirement plans does not start immediately you resume work with an employee it has to do with the numbers of years you've worked with an employer. So,this statement contains wrong information.

In Option D - INCORRECT.
No employee will be willing to resign after working for so many years with a company and still not having right to pension plan. Also its only the employer that can determine the employees retirement time after which a pension right will be given.

In Option E - INCORRECT.
This statement still does not determine why companies have not experienced any loss of employees. Because if there is no adequate retirement plan no highly trained and experience employee would want to work with such company for years.
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