Final answer:
The decrease in popularity of defined benefit plans among employers is due to the predictability and lower inflation vulnerability of defined contribution plans, such as 401(k)s, which provide a fixed employer contribution and investment potential for employees.
Step-by-step explanation:
The statement that best explains the reason for the decrease in popularity of "defined benefit plans" by employers in Canada is that employers believe defined contribution plans are much more predictable from a funding perspective. Over time, employees have seen a shift from pensions and defined benefits retirement plans to defined contribution plans, such as 401(k)s and 403(b)s. These new plans involve a fixed amount being contributed by the employer to the employee's retirement account, which the employee can then invest. They offer tax deferral, portability, and a hedge against inflation since retirees can potentially receive returns that outpace inflation, something not typical with traditional pension plans. The change has occurred due to pensions being susceptible to erosion from inflation over time, especially as fixed nominal dollar amounts do not increase with rising costs of living. This makes defined benefit plans less appealing to employers looking for more predictable and less inflation-vulnerable retirement options for their staff.