Question

Multiple Select Question

Select all that apply
Other post-employment benefits ______.

-are much easier to estimate than pension benefits
-are generally less well funded than pensions
-incur the majority of costs after retirement
-may be managed in trust funds

Answer 1

Other post-employment benefits are generally less well funded than pensions, incur the majority of costs after retirement, and may be managed in trust funds to cover future obligations. Hence, option B is the correct answer.

Step-by-step explanation:

When addressing the nature of other post-employment benefits, several factors must be considered. Unlike pension benefits that are funded and guaranteed by employers, other types of post-employment benefits such as medical insurance and life insurance are more complex to estimate and are generally less well funded than pensions. This is because pensions are akin to annuities with fixed annual payments that employers save and pay out to retired workers.

On the other hand, costs for other post-employment benefits incur the majority of costs after retirement, when the employee starts to claim these benefits. While pensions are increasingly being replaced by "defined contribution" plans like 401(k)s and 403(b)s, other post-employment benefits may be managed in trust funds to ensure that there are resources available to meet future obligations.