B is correct. Funding risk of a defined benefit plan is the risk that the value of the pension plan assets will not be sufficient to meet the pension plan liabilities. If the plan has a deficit (that is, if the surplus turns negative), the plan sponsor (the manufacturing company) has to provide additional contributions to the fund. This additional contribution (the funding risk) is borne by the company's shareholders (and not by the employees). Thus, the funding risk represents a true long-term risk to the company (plan sponsor). The time horizon of payouts does not eliminate funding risk. In fact, it is the mismatch between assets and liabilities that creates funding risk. In a low interest rate environment, the value of assets (equities on the asset side) will rise; however, the value of liabilities is likely to increase more, thereby exacerbating funding risk. Immunizing the portfolio, essentially matching duration of assets and liabilities, will reduce funding risk.