Certified Plan Sponsor Professional (CPSP) Practice Exam

How does a retirement plan support a company's workforce strategy?

1. By only focusing on internal promotions

2. By offering limited employee options

3. By attracting qualified workers and increasing company value

4. By emphasizing short-term financial gains

The correct answer is: By attracting qualified workers and increasing company value

A retirement plan plays a significant role in supporting a company's workforce strategy by attracting qualified workers and ultimately increasing company value. When a company offers a robust retirement plan, it signals to potential employees that the organization is committed to their long-term financial well-being. This commitment can create a competitive edge in attracting top talent, as skilled employees often seek employers who provide comprehensive benefits. Furthermore, a solid retirement plan contributes to employee retention. By offering a plan that encourages employees to save for their future and provides additional incentives, companies can foster loyalty and reduce turnover. This not only enhances team stability but can also lead to greater productivity and overall company performance, thereby increasing the firm's value. In contrast, focusing only on internal promotions or offering limited employee options would fail to address the broader needs of talent acquisition and retention. Emphasizing short-term financial gains might neglect long-term workforce stability and employee satisfaction, which are critical for sustainable growth. Thus, a well-designed retirement plan aligns with long-term strategic goals and supports a valuable workforce.