Final answer:
According to PAS 26, a hybrid retirement plan could be accounted for as either a defined benefit plan or a defined contribution plan; it depends on the dominant characteristics of the plan. Hence, option (d) partly a and partly b is correct.
Step-by-step explanation:
According to PAS 26, a hybrid retirement plan may be accounted for as defined benefit plan or defined contribution plan depending on the terms and underlying economic substance of the plan. If the plan contains characteristics of both a defined benefit plan and a defined contribution plan, it must be classified based upon which aspect is predominant.
Defined benefit plans promise a specified pension payment, lump-sum (or combination thereof) on retirement that is determined by a formula based on the employee's earnings history, tenure of service, and age, rather than depending directly on individual investment returns. Pensions and other defined benefits retirement plans are becoming less common.
In contrast, defined contribution plans, such as 401(k)s and 403(b)s, involve employers contributing a fixed amount to the worker's retirement account regularly, and often the employee contributes as well. These plans are advantageous because they are tax deferred, portable, and they potentially shield retirees from the inflation costs that can affect traditional pensioners if the investments generate real rates of return.