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

Question: 1 / 660

What type of plan provides definitely determinable benefits?

An age-weighted plan

A cash balance plan

A cash balance plan is a type of defined benefit plan that allows participants to receive a certainty of benefits upon retirement. In a cash balance plan, the employer credits a participant's account with a set percentage of their compensation, and it often includes interest credits, which accumulate over time. This structure provides participants with a clear understanding of the benefits they will receive, as the account balance is determinable.

Unlike other options, such as an age-weighted plan or a money purchase plan, which are typically classified under defined contribution plans and do not guarantee a specific benefit amount at retirement, the cash balance plan ensures participants know the value of their retirement benefit ahead of time. Thus, when asked about the plan that provides definitely determinable benefits, the cash balance plan stands out for its predictability and clarity in future payouts.

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A money purchase plan

A fixed benefit plan

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