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

An excess benefit plan is designed specifically to provide benefits that exceed the limitations imposed by the Internal Revenue Code (IRC), particularly Section 415, which caps the maximum amount that can be contributed to a qualified retirement plan. These plans are established to make participants whole for any benefits lost as a result of these statutory limits, thus ensuring that high earners can still receive the full retirement benefits intended despite the tax code restrictions.

The other options do not fulfill this specific purpose. A flat benefit formula typically provides a fixed benefit amount regardless of contribution limits and is not specifically designed to address IRC Section 415 constraints. A cash balance plan combines features of defined benefit and defined contribution plans but also does not directly relate to compensating participants for losses due to IRC limits. A top hat plan is a non-qualified deferred compensation arrangement used primarily for a select group of management or highly compensated employees, but it does not specifically address the issue of making participants whole for losses caused by IRC limitations. Thus, the excess benefit plan clearly stands out as the correct choice for addressing this particular need.