Which of the following is a goal of retirement plans?

• A. Paternalism
• B. Competitive benefits
• C. Strategic workforce management
• D. Tax deferral only

Answer: (A)

The main idea is that retirement plans exist to provide security for employees in retirement, reflecting an employer’s protective, welfare-oriented role. This protective stance—where the employer takes responsibility to help employees avoid poverty or hardship in old age—embodies paternalism. Retirement plans are designed to shield workers from retirement income risk, recognizing that individuals may under-save or face longevity uncertainty.

That’s why this option fits best: it captures the purpose of retirement plans as a form of employer responsibility and care for employees’ future financial well-being. While tax deferral is an important feature and competitive benefits or strategic workforce management are valuable outcomes, they are not the fundamental goal in the same protective sense.