Final answer:
It is true that the vested benefit obligation refers to the benefits that employees are entitled to after leaving the company. This obligation is a key element in traditional pension plans, but many companies have shifted to defined contribution plans like 401(k)s, which offer portability and are less reliant on company solvency.
Step-by-step explanation:
The statement that the vested benefit obligation is the benefits employees are entitled to receive even if they are no longer employed by the company is True. The vested benefit obligation reflects the portion of the pension benefits that have been earned by employees and are not forfeit even if they leave the company before retirement. In contrast to traditional defined benefit pension plans, defined contribution plans, such as 401(k)s and 403(b)s, have become more prevalent. In defined contribution plans, employees have the portability of their retirement savings and are not as affected by a company's financial failure.
Regarding pension insurance, employers that offer pensions are mandated to contribute to the Pension Benefit Guarantee Corporation, which provides some security for pension benefits if a company defaults. Nonetheless, the shift from traditional pension plans to defined contribution plans has reduced the reliance on such insurance, as these plans rely on employee and employer contributions and investment returns.