Retirement and pensions question

Business English Lesson, Advanced Level

ESL/EFL Test #160 [color=blue]“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
© contributions
(d) payouts

Business English Lesson, Advanced Level

ESL/EFL Test #160 [color=blue]“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: © contributions
[size=200]_________________________[/size]

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

.
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.
.