Which characteristic of a pension is primarily based on employment duration?

The correct answer focuses on the amount of monthly payments a pension provides, which is significantly influenced by the duration of employment. Essentially, many pension plans use a formula that takes into account the number of years an employee has worked for the company. The longer the employee has been with the employer, the larger the pension benefit they may expect to receive upon retirement, as pension calculations often involve a combination of salary history and years of service.

While other factors in the choices could relate to pensions, they do not primarily hinge on employment duration as the amount of monthly payments does. For instance, tax implications and eligibility for benefits may involve additional circumstances beyond just how long someone has been employed, such as specific plan rules or tax laws that apply to all employees regardless of their duration with a company. Likewise, the length of contributions addresses how long payments have been made into the pension fund, but this is distinct from the overall duration of employment, which is what primarily determines the monthly payment amount.