Which employee benefit arrangement allows employees to choose from a variety of benefits?

A cafeteria plan is a type of employee benefit arrangement that provides employees with the flexibility to choose from a variety of benefits. This arrangement is designed to meet the diverse needs of employees by allowing them to select benefits that are most relevant to them, such as health insurance, dental coverage, life insurance, and other perks.

The structure of a cafeteria plan enables employees to allocate a predetermined amount of benefits dollars toward their chosen options, making it a customizable solution that can address individual preferences and circumstances. This model not only increases employee satisfaction and engagement but also helps employers manage benefits costs more effectively, as they can offer a wider variety of options without significantly increasing expenses.

In contrast, the other options mentioned do not provide the same level of choice. For example, a flexible spending account offers tax advantages and allows employees to set aside pre-tax dollars for eligible expenses but does not provide a selection of different types of benefits. A pension plan is primarily focused on providing retirement income and does not allow employees to choose from various benefits. Meanwhile, a group insurance plan generally offers a single type of insurance coverage to all employees, without the customization features that a cafeteria plan provides.