DC Pension Plan Benefits
KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals
- Identify factors that influence the pension benefit amount for a defined contribution pension plan member, such as:
- Amount of money contributed to the account
- Length of investment time horizon
- Earnings on the amount invested
- Identify that the employee retains the risk for the value of the pension benefit received from the plan.
- Estimate the projected pension benefit for a defined contribution pension plan member.
- Estimate the tax impact of receiving a pension benefit from a defined contribution pension plan.
- Explain the pension benefit options that may be available to a defined contribution pension plan member.
- Explain how each of the factors may impact the decision to commence receiving a pension benefit from a defined contribution pension plan, such as:
- Life expectancy
- Cash flow needs
- Impact on government benefits
- Tax impact
- Evaluate the factors to consider that may impact the decision to commence receiving a pension benefit from a defined contribution pension plan.
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