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

Target benefit plans are a type of retirement plan that combines features of both defined contribution plans and defined benefit plans. Under the Employee Retirement Income Security Act (ERISA), there are specific requirements regarding survivor benefits, particularly for married participants. These plans are designed to provide a retirement benefit based on target income rather than defining a specific benefit amount.

The correct answer highlights that these plans are indeed required to offer survivor annuity benefits to married participants. This requirement is in place to ensure that if a participant passes away, their surviving spouse receives a portion of the retirement benefits, which aligns with the protections ERISA provides to marital rights in retirement planning. The aim is to safeguard the financial interests of surviving spouses, ensuring they are taken care of financially after the death of their partner.

The other options do not accurately reflect the requirements set forth by ERISA regarding survivor benefits in retirement plans. For instance, stating that target benefit plans only offer lump sum payouts overlooks the requirement for survivor annuities for married participants. Similarly, suggesting that these plans are exclusively for single participants disregards the reality that they must accommodate married participants and meet legal requirements intended to protect their benefits. Lastly, mentioning that such benefits are only offered if specified by the employer is misleading, as federal law