Chartered Retirement Planning Counselor (CRPC) Practice Exam 2026 - Free CRPC Practice Questions and Study Guide

A plan that consists of a written agreement between an employer and an employee can indeed take the form of both qualified plans and nonqualified deferred compensation plans.

Qualified plans, such as 401(k) plans or pension plans, require a written plan document that outlines the rules and terms of the retirement plan. These plans must meet specific regulatory requirements set by the Internal Revenue Service (IRS) and the Employee Retirement Income Security Act (ERISA), thus emphasizing the formal agreement aspect between employer and employee.

Nonqualified deferred compensation plans, on the other hand, also necessitate a written agreement. These plans are not subject to the same regulatory requirements as qualified plans, allowing for more flexibility in their structure and terms. However, they still must be documented in a formal written agreement to ensure clarity in the rights and obligations of both parties involved.

The significance here is that both types of plans rely on a formalized understanding that outlines the compensation deferral arrangements and the stipulations surrounding those agreements. Therefore, the inclusion of both qualified and nonqualified plans under a written agreement is vital for ensuring compliance, clarity, and trust between employers and employees regarding retirement compensation.