Certified Plan Sponsor Professional (CPSP) Practice Exam

Which of the following are the two types of plan eligibility requirements?

1. Income and job title

2. Age and service

3. Location and duration of employment

4. Job classification and salary

The correct answer is: Age and service

The correct answer identifies age and service as fundamental types of plan eligibility requirements. These criteria are crucial for determining whether an employee can participate in specific retirement plans or benefits offered by an employer. Age requirements often stipulate a minimum age for participation, typically to ensure that employees are at a certain life stage where they can begin to make long-term plans for retirement. Similarly, service requirements relate to the length of employment, which ensures that only those who have been with the company for a designated period can access particular benefits. This focus on age and length of service not only serves to manage the plan's costs but also aligns with the goals of encouraging long-term employment and planning for retirement, which can provide security for employees. Other options present eligibility criteria that may not universally apply as primary requirements. For example, income and job title might influence eligibility for specific benefits, but they do not typically serve as standard criteria for participation in plans. Location can vary by company policy, and job classification and salary might impact the benefit amount instead of whether an employee is eligible to join the plan in the first place. Thus, age and service distinctly represent the typical baseline measures for plan eligibility requirements across many types of benefit programs.