Retirement and pensions question

[FangFang]

Business English Lesson, Advanced Level

ESL/EFL Test #160 "Retirement and Pensions", question 7

The most obvious reason for the existence of pensions is the tax advantage, since pension ......... are permitted to accumulate untaxed until retirement.

(a) benefits
(b) calculations
(c) contributions
(d) payouts

Business English Lesson, Advanced Level

ESL/EFL Test #160 "Retirement and Pensions", answer 7

The most obvious reason for the existence of pensions is the tax advantage, since pension contributions are permitted to accumulate untaxed until retirement.

Correct answer: (c) contributions
_________________________

Hi,
You mean workers needn't pay the pension taxes until they retire? But due to the high inflation they might pay more taxes when they get retired . Do you think it is still an tax advantage?? Personally, i don't think it is good for the workers, maybe it is a tax advantage for the companies. By the way, How can those employers benefit from the pension expenses ?(only tax advantages??)

Thanks

[Mister Micawber]

.
Sorry, FF-- I'm not an economics expert; I just write grammar and vocabulary questions. It seems to me that it is a potential tax advantage, depending on the direction of the dollar-- anyway, the taxes needn't be paid now.
.
_________________
Canadian-American native speaker
who teaches English for a living at Mister Micawber's
ESL cafe: Interview with Mister Micawber