Chartered Retirement Planning Counselor (CRPC) Practice Exam 2025 – Comprehensive All-in-One Guide for Exam Success!

A pension plan typically provides for the distribution of benefits when an employee reaches the plan's established retirement age or when there is a severance of employment. This is based on the fundamental design of pension plans, which are intended to serve as retirement income, and the eligibility criteria are usually tied to the age of the participant or their status with the employer. Most pension plans specify a retirement age—often between 55 and 65 years—at which employees can begin to receive their benefits. Severance of employment also triggers eligibility for distribution, as participants may be entitled to receive their benefits upon leaving the employer, either voluntarily or involuntarily.

The other conditions do not align with the primary purpose of pension plans. For example, the performance of the plan's investments does not dictate when benefits are distributed; rather, it impacts the size of the retirement benefit over time. Additionally, the employer’s decision to cease contributions is not a direct trigger for benefit distribution. Finally, reaching a minimum contribution requirement is more about eligibility to participate in the pension plan than a condition for distribution of benefits. Thus, the correct scenario is indeed the one involving reaching retirement age or severance of employment.