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

An in lieu of plan is most accurately referred to as a pure Deferred Compensation Plan. This type of plan allows employees to defer a portion of their income, which is then paid out at a later date, often during retirement. The primary idea behind an in lieu of plan is to provide an alternative method of compensation that can be more tax-efficient for employees. It enables clients to enhance their retirement savings while potentially lowering their current taxable income.

In contrast, a defined benefit plan and a pension plan refer to structured retirement plans that offer predetermined payouts upon retirement based on a formula considering salary and years of service. A qualified profit-sharing plan, on the other hand, is a type of retirement plan where an employer makes contributions to employees' accounts based on company profits. These concepts differ fundamentally from the structure and mechanics of a pure Deferred Compensation Plan, which centers around deferring income.