Final answer:
Employer pension plan contributions must be vested after two years of service, ensuring employees' entitlement to benefits. Defined contribution plans have largely replaced traditional pensions, offering advantages like portability and inflation protection. Employers also contribute to the Pension Benefit Guarantee Corporation as a safety measure for employees.
Step-by-step explanation:
In most provinces, employer pension plan contributions must be vested once the employee has completed two years of service. Vested means that the employee is entitled to the pension benefits after fulfilling certain conditions such as duration of service, even if they no longer work for the employer.
Defined contribution plans, like 401(k)s and 403(b)s, have largely replaced traditional defined benefit pension plans. These plans involve regular contributions by the employer, which are invested by the employee in various investment vehicles. Such plans offer tax deferment and portability, reducing the impact of inflation on retirees' savings compared to traditional pensions.
Additionally, by law, employers must pay into the Pension Benefit Guarantee Corporation, providing a safety net for workers if a company is unable to fulfill its pension promises due to bankruptcy.