for the longest time companies offered the employees who stayed with the company for many years...

for the longest time companies offered the employees who stayed with the company for many years a defined pension plan to help them retire when it was time. that time has since passed and companies now offer a defined contribution plan instead.

why do you think that they have made this change? Do you think that this is an ethical behavior for the companies of today? why or why not?

Expert Solution

In defined pension plan only employer only contribute to pension fund. But defined contribution plan both employer and employee together contribute to retirement benefit.

When employee is involved in his retirement benefit plans it might to some extent boots him to produce more deliver more now for his wealth at later point of time. It will always benificial company as well.

Now a days companies and their management become smarter and grab every opportunity which will enable to get maximum potential from their employees.

Retirement benefits linked with employee performance is appear to fair in this respect.

Well, I think changing from defined pension plan to defined contribution plan by companies now a day's is ethical. But somehow at initial stages of implementation past employees who are going to retire in near future will get little more benefit as they get retirement benefit from pension plan only without much efforts as compared to contribution plan.

But fresh employees are highly motivated to do Max work to contribute as much as possible for there retirement plans.

This is ethical practice and it should be encouraged to reach maximum benefits.

ekkarill92 answered 2 weeks ago

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