Chartered Retirement Planning Counselor (CRPC) Practice Exam 2025 - Free CRPC Practice Questions and Study Guide

The allocation of contributions in an age-weighted profit sharing plan is primarily influenced by the age and compensation of the participants. This type of plan is designed to provide a greater benefit to older employees compared to younger employees, reflecting the premise that older employees are closer to retirement and may need larger contributions to adequately fund their retirement. The formula used to allocate contributions takes both the age and the salary of each participant into account, allowing for a more equitable distribution of retirement funds based on these factors.

In contrast, other factors like length of service of participants or the financial performance of the company may play a role in retirement planning but do not directly affect the allocation distributions in an age-weighted profit sharing plan. Similarly, equal contribution rates do not apply in this context, as the nature of the age-weighted plan is to adjust contributions based on age and compensation rather than applying a uniform rate across participants.