1.What are the three legs of the “three-legged stool” for retirement systems in Canada? According to the
assigned reading, why are all three “legs” necessary? (5 marks)
2.Describe one benefit and one drawback of employer-sponsored pension plans from each of the
following perspectives: the government, employees, and employers. (10 marks)
3.What is the principal difference between defined benefit (DB) and defined contribution (DC) pension
plans? (5 marks)
4.How do the pros and cons associated with a defined benefit plan vary depending whether you are the
employer or employee? (5 marks)
5.Explain the difference between the aims of the regulations established by the provinces (pension
standards legislation) and that contained in the Income Tax Act for pension plans. (5 marks)
6.ABC, Inc. is setting up a pension plan for its employees. There are 50 employees located at the
company’s headquarters in Toronto, 100 employees at the manufacturing plant near Edmonton, and 75
employees at the distribution centre in Vancouver. In which jurisdiction should ABC, Inc. register its
pension plan? Why? (5 marks)
Sample Solution