Chartered Retirement Planning Counselor (CRPC) Practice Exam

In the context of a rabbi trust, which is a type of trust used primarily to provide deferred compensation to employees while maintaining some control by the employer, it is important to understand the events that typically trigger benefit payments. Retirement, change in ownership of the employer, and separation from service are all recognized events that would generally lead to the payment of benefits from a rabbi trust. These are events that reflect a shift in the employee's status with the company, whether by retiring from their role, the employer experiencing a significant structural change, or the employee separating from their job for any reason. On the other hand, the employer's insolvency is not a recognized event for payment of benefits from a rabbi trust. This is because one of the defining traits of a rabbi trust is that it remains a part of the general assets of the company. As such, if the employer becomes insolvent, the assets in the rabbi trust may be subject to claims by creditors, and the trust is not obligated to make payments to employees until the company resolves its financial issues. This means that despite the presence of a rabbi trust, employees do not have guaranteed access to their deferred compensation in the event of the employer's financial distress. Thus,