Exam RET-101

RET 101 – Retirement Plan Design is an exam of the Society of Actuaries' Fellowship (FSA) pathway. Its syllabus covers the Nov 2026/Mar 2027/Jul 2027 sittings.

Learning Objectives

Benefit Plan Structure, Features and Investments (30–50%) The candidate will understand how to analyze different types of designs for retirement plans and retirement plan investments.

1. Describe the structure of the following plans:
   • Traditional defined benefit plans
   • Defined contribution and savings plans
   • Hybrid plans
   • Other alternative retirement plans such as executive retirement plans, shared risk plans, target benefit plans, etc.
2. Given a plan type, explain the relevance and range of plan features including the following:
   • Plan eligibility requirements
   • Benefit eligibility requirements, accrual, vesting
   • Benefit / contribution formula, including methods of integration with benefits provided by social insurance
   • Payment options and associated adjustments to the amount of benefit
   • Ancillary benefits
   • Benefit subsidies and their value, vested or non-vested
   • Participant investment options
   • Required and optional employee contributions
   • Early and late retirement options
   • Indexing
3. Discuss investment of retirement plan assets
   • Assess the different types and combinations of investment vehicles typically used for providing retirement benefits.
   • Distinguish the various strategies, approaches and techniques used to manage retirement fund assets

Readings:

• Retirement Plans - 401(k)s, IRAs and Other Deferred Compensation Approaches, Allen et al., 12th Edition, 2018 (details of the U.S. regulatory environment will not be tested) (1a, 1b, 1c)
  • Ch. 2: Strategic Plan Design
• Fundamentals of Private Pensions, McGill et al., 9th Edition, 2010 (1a, 1b, 1c)
  • Ch. 5: Human-Resource Incentives (excluding pp. 154-156)
• Morneau Shepell, Handbook of Canadian Pension and Benefit Plans, 17th Edition, 2020 (details of the Canadian regulatory environment will not be tested) (1a, 1b, 1c)
  • Ch. 1: Overview of Retirement Income Arrangements
• RET101-110-25: Social Security Programs Throughout the World: Europe, 2018 (1b)
• Retirement Plans - 401(k)s, IRAs and Other Deferred Compensation Approaches, Allen et al., 12th Edition, 2018 (details of the U.S. regulatory environment will not be tested)
  • Ch. 3: Defined Contribution versus Defined Benefit Plans (pp. 50-54) (1a)
  • Ch. 17: Defined Benefit Plan Features (1a, 1b)
  • Ch. 8: Cash or Deferred Arrangements (CODAs) under Section 401(k) (pp. 125-128) (1a, 1b)
  • Ch. 11: Behavioral Finance Impacts on Defined Contribution Plan Designs (excluding pp. 198-200) (1a, 1b, 1c)
  • Ch. 14: Executive Retirement Arrangements (pp. 250-263) (1a, 1b)
  • Ch. 21: Cash Balance and Other Hybrid Retirement Plans (1a, 1b)
  • Ch. 29: Facilitating Investment of Defined Contribution Plan Assets (pp. 555-561) (1a, 1c)
• Fundamentals of Private Pensions, McGill et al., 9th Edition, 2010
  • Ch. 10: Defined Benefit Design (1a, 1b)
  • Ch. 28: Investing and Defined Contribution Plans (1a, 1c)
• Morneau Shepell, Handbook of Canadian Pension and Benefit Plans, 17th Edition, 2020 (details of the Canadian regulatory environment will not be tested)
  • Ch. 3: Employer Pension Plans: Terms and Conditions (1a, 1b)
  • Ch. 7: Pension Fund Investment Management (1c)
• RET101-102-25: Defined Contribution Plan Success Factors (1a, 1b)
• RET101-100-25: Framework for Future Defined Contribution Design (1a, 1b)
• RET101-123-26: CAPSA Guideline No. 3: Guidelines for Capital Accumulation Plans (1a, 1b)
• RET101-109-25: Designing the Future of Target-Date Funds (1a, 1c)
• RET101-124-26: The Future of DC Plans: Key Trends for 2025 and Beyond (1a, 1c)
• The Next Evolution in Defined Contribution Retirement Plan Design: A Guide for DC Plan Sponsors to Implementing Retirement Income Programs, SOA, Sep 2013 (pp. 61-88 background only) (1a, 1b)
• RET101-104-25: The Hybrid Handbook: Not All Hybrids are Created Equal (1a, 1b)
• RET101-106-25: Multi-Employer Plans (1a, 1b)
• RET101-107-26: Introduction and Overview of Retirement Plan Investments (1c)
• RET101-108-25: CAPSA, Guideline No. 6, Pension Plan Prudent Investment Practices Guideline (1c)
• Report of the Task Force on Target Benefit Plans, CIA, Jun 2015, (excluding sections 4, 5, & Appendices) (1a, 1b)
• Analysis of Target Benefit Plan Design Options, SOA, Feb 2016, pp. 12-16 (1a)
• RET101-101-25: Integration with Social Security (1b)
• RET101-103-25: Phased Retirement: An Important Part of the Evolving Retirement Scene (1b)

Participant Risks (15–25%) The candidate will understand how to analyze the risks faced by retirees and the participants of retirement plans.

1. Identify risks faced by retirees and the elderly
2. Describe and contrast the risks faced by participants of various sponsored plans, such as:
   • Retirement plans sponsored by public sector employers
   • Single employer sponsored retirement plans
   • Retirement plans involving more than one employer, and
   • Social insurance plans
3. Evaluate benefit adequacy and measure replacement income for members of a particular plan given other sources of retirement income
4. Describe ways in which retirement plan design can manage the range of risks faced by plan participants and retirees

Readings:

• Fundamentals of Private Pensions, McGill et al., 9th Edition, 2010
  • Ch. 5: Human-Resource Incentives (excluding pp. 154-156) (2b)
  • Ch. 9: Risks of Outliving Resources (pp. 270-289 only) (2a, 2d)
• Managing Post-Retirement Risks: Strategies for a Secure Retirement, SOA, 2025 (2a)
• RET101-114-25: How Accurately does 70% Final Employment Earnings Replacement Measure Retirement Income (In)Adequacy? Introducing the Living Standards Replacement Rate (LSRR): (sections 3.1, 3.2, 3.4, 4 & 5 and Appendices background only) (2c)
• RET101-110-25: Social Security Programs Throughout the World: Europe, 2018 (2b)
• Retirement Plans - 401(k)s, IRAs and Other Deferred Compensation Approaches, Allen et al., 12th Edition, 2018
  • Ch. 17: Defined Benefit Plan Features (2b, 2d)
  • Ch. 11: Behavioral Finance Impacts on Defined Contribution Plan Designs (excluding 198-200) (2a, 2d)
  • Ch. 21: Cash Balance and Other Hybrid Retirement Plans (2d)
  • Ch. 14: Executive Retirement Arrangements (pp. 250-263) (2d)
• The Next Evolution in Defined Contribution Retirement Plan Design: A Guide for DC Plan Sponsors to Implementing Retirement Income Programs, SOA, Sep 2013 (pp. 61-88 background only) (2a, 2d)
• RET101-111-25: Risk Management and Public Plan Retirement Systems - Appendices B and C only (remainder is background) (2b)
• Primer on Retirement Income Strategy Design and Evaluation, SOA Research, Jan 2023, Executive Summary, Sections 1, 2, 5, 6 & Appendix A (2a, 2d)
• RET101-112-25: Private Pensions: Alternative Approaches Could Address Retirement Risks Faced by Workers but Pose Tradeoffs, pp.1-35 (2a, 2d)
• RET101-113-25: The Promise of Defined Ambition Plans: Lessons for the United States (2d)
• RET101-115-25: An Improved Application of the Variable Annuity (2d)
• RET101-116-25: The Case for Collective DC (sections 1-7 only) (2d)
• Report of the Task Force on Target Benefit Plans, CIA, Jun 2015 (excluding sections 4, 5 & Appendices) (2d)
• Educational Note: Financial Risks Inherent in Multi-Employer Pension Plans and Target Benefit Pension Plans, CIA, May 2011 (2b)

Sponsor Risks (15–25%) The candidate will understand how to analyze the risks faced by sponsors of retirement plans.

1. Identify how plan features, temporary or permanent, can adversely affect the plan sponsor
2. Assess the sponsor risk from options offered, including:
   • Postponed retirement
   • Early retirement
   • Optional forms of payment factors
   • Embedded options
   • Portability options
   • Investment options
   • Decumulation features
3. Describe ways to mitigate the risks identified with a particular plan feature

Readings:

• RET101-104-25: The Hybrid Handbook: Not All Hybrids are Created Equal (3a, 3b, 3c)
• Report of the Task Force on Target Benefit Plans, CIA, Jun 2015 (excluding sections 4, 5 & Appendices) (3a, 3b, 3c)
• The Next Evolution in Defined Contribution Retirement Plan Design: A Guide for DC Plan Sponsors to Implementing Retirement Income Programs, SOA, Sep 2013 (pp. 61-88 background only) (3b)
• RET101-111-25: Risk Management and Public Plan Retirement Systems - Appendices A-C only (remainder is background) (3a)
• Pension Risk Transfer: Evaluating Impact and Barriers for De-Risking Strategies, SOA, Jun 2021 (pp. 8-19 only) (3c)
• Primer on Retirement Income Strategy Design and Evaluation, SOA Research, Jan 2023, Executive Summary, Sections 1, 2, 5, 6 & Appendix A (3b)
• RET101-117-25: Implementing Early Retirement Incentive Programs: A Step-by-Step Guide (3b)
• RET101-118-25: Pension Issues in Mergers and Acquisitions (3a)
• Embedded Options in Pension Plans: Catalogue of Embedded Options Survey of Prevalence of Embedded Options, SOA, Aug 2011, pp. 1-17 (3b)

Benefit Plan Design Recommendation (15–25%) The candidate will understand how to evaluate sponsors’ goals for the retirement plan, evaluate alternative plan types and features, and recommend a plan design appropriate to address those goals.

1. Describe ways to identify and prioritize the sponsor’s goals related to the design of the retirement plan
2. Assess the tradeoffs between different goals
3. Assess the feasibility of achieving the sponsor’s goals for their retirement plan
4. State relationships or recognize contradictions between a sponsor’s plan design goals and retirement risks faced by retirees
5. State relationship or recognize contradictions between sponsor’s goals and taxpayers’ perspective when evaluating benefit plan design
6. Identify the ways that regulation impacts the sponsor’s plan design goals
7. Design retirement programs that manage retirement risk, are consistent with sponsor’s objectives and promote employee behavior consistent with sponsor’s objectives.
8. Evaluate the pros and cons from both a sponsor and employee perspective of introducing options that impact the labor force demographics
9. Recommend a method to integrate benefits provided by social insurance with retirement plan designs in order to meet the plan sponsor’s particular goals and defend the recommendation
10. Recommend an appropriate plan type and plan design features for providing retirement benefits and defend the recommendations
11. Assess the potential effects, including tax implications, of various investments and investment policies on all of the stakeholders
12. Identify and assess the sources of investment risk applicable to retirement fund assets
13. Explain and apply restrictions on plan design features to a proposed plan design, taking into accounting the use of tax incentives and understanding conflicts between regulations and design objectives
14. Identify changes that could reduce sponsor risk.

Readings:

• Retirement Plans - 401(k)s, IRAs and Other Deferred Compensation Approaches, Allen et al., 12th Edition, 2018 (4a-4n)
  • Ch. 2: Strategic Plan Design
  • Ch. 3: Defined Contribution versus Defined Benefit Plans (pp. 50-54)
  • Ch. 29: Facilitating Investment of Defined Contribution Plan Assets (pp. 555-561)
• Fundamentals of Private Pensions, McGill et al., 9th Edition, 2010 (4a-4n)
  • Ch. 5: Human-Resource Incentives (excluding pp. 154-156)
• RET101-102-25: Defined Contribution Plan Success Factors (4a-4n)
• RET101-123-26: CAPSA Guideline No. 3: Guidelines for Capital Accumulation Plans (4a-4n)
• RET101-104-25: The Hybrid Handbook: Not All Hybrids are Created Equal (4a-4n)
• RET101-121-25: The Big Chill (4a-4n)
• RET101-120-25: Design Matters: Plan Distribution Options (4a-4n)
• RET101-113-25: The Promise of Defined Ambition Plans: Lessons for the United States (4a-4n)
• RET101-115-25: An Improved Application of the Variable Annuity (4a-4n)
• RET101-122-25: Innovations in the Canadian Retirement Landscape: CAAT Pension Plan (4a-4n)
• RET101-119-25: Ch. 1 (pp. 4-11) and Ch. 5 of Pension Policy: The Search for Better Solutions (4e, 4f)
• Pension Risk Transfer: Evaluating Impact and Barriers for De-Risking Strategies, SOA, Jun 2021 (pp. 8-19 only) (4n)
• RET101-103-25: Phased Retirement: An Important Part of the Evolving Retirement Scene (4h)
• RET101-109-25: Designing the Future of Target-Date Funds (4l)
• RET101-107-26: Introduction and Overview of Retirement Plan Investments (4l)
• RET101-124-26: The Future of DC Plans: Key Trends for 2025 and Beyond (4l)

Source Material

Source Material

• Retirement Plans - 401(k)s, IRAs and Other Deferred Compensation Approaches, Allen et al., 12th Edition, 2018 (details of the U.S. regulatory environment will not be tested)
  • Ch. 2: Strategic Plan Design (1a, 1b, 1c)
  • Ch. 3: Defined Contribution versus Defined Benefit Plans (pp. 50-54) (1a)
  • Ch. 17: Defined Benefit Plan Features (1a, 1b)
  • Ch. 8: Cash or Deferred Arrangements (CODAs) under Section 401(k) (pp. 125-128) (1a, 1b)
  • Ch. 11: Behavioral Finance Impacts on Defined Contribution Plan Designs (excluding pp. 198-200) (1a, 1b, 1c)
  • Ch. 14: Executive Retirement Arrangements (pp. 250-263) (1a, 1b)
  • Ch. 21: Cash Balance and Other Hybrid Retirement Plans (1a, 1b)
  • Ch. 29: Facilitating Investment of Defined Contribution Plan Assets (pp. 555-561) (1a, 1c)
  • Ch. 17: Defined Benefit Plan Features (2b, 2d)
  • Ch. 11: Behavioral Finance Impacts on Defined Contribution Plan Designs (excluding 198-200) (2a, 2d)
  • Ch. 21: Cash Balance and Other Hybrid Retirement Plans (2d)
  • Ch. 14: Executive Retirement Arrangements (pp. 250-263) (2d)
  • Ch. 2: Strategic Plan Design (4a-4n)
  • Ch. 3: Defined Contribution versus Defined Benefit Plans (pp. 50-54) (4a-4n)
  • Ch. 29: Facilitating Investment of Defined Contribution Plan Assets (pp. 555-561) (4a-4n)
• Fundamentals of Private Pensions, McGill et al., 9th Edition, 2010
  • Ch. 5: Human-Resource Incentives (excluding pp. 154-156) (1a, 1b, 1c)
  • Ch. 10: Defined Benefit Design (1a, 1b)
  • Ch. 28: Investing and Defined Contribution Plans (1a, 1c)
  • Ch. 5: Human-Resource Incentives (excluding pp. 154-156) (2b)
  • Ch. 9: Risks of Outliving Resources (pp. 270-289 only) (2a, 2d)
  • Ch. 5: Human-Resource Incentives (excluding pp. 154-156) (4a-4n)
• Morneau Shepell, Handbook of Canadian Pension and Benefit Plans, 17th Edition, 2020 (details of the Canadian regulatory environment will not be tested)
  • Ch. 1: Overview of Retirement Income Arrangements (1a, 1b, 1c)
  • Ch. 3: Employer Pension Plans: Terms and Conditions (1a, 1b)
  • Ch. 7: Pension Fund Investment Management (1c)
• RET101-110-25: Social Security Programs Throughout the World: Europe, 2018
  • Outcomes 1b
  • Outcomes 2b
• RET101-102-25: Defined Contribution Plan Success Factors
  • Outcomes 1a, 1b
  • Outcomes 4a-4n
• RET101-100-25: Framework for Future Defined Contribution Design
  • Outcomes 1a, 1b
• RET101-123-26: CAPSA Guideline No. 3: Guidelines for Capital Accumulation Plans
  • Outcomes 1a, 1b
  • Outcomes 4a-4n
• RET101-109-25: Designing the Future of Target-Date Funds
  • Outcomes 1a, 1c
  • Outcomes 4l
• RET101-124-26: The Future of DC Plans: Key Trends for 2025 and Beyond
  • Outcomes 1a, 1c
  • Outcomes 4l
• The Next Evolution in Defined Contribution Retirement Plan Design: A Guide for DC Plan Sponsors to Implementing Retirement Income Programs, SOA, Sep 2013 (pp. 61-88 background only)
  • Outcomes 1a, 1b
  • Outcomes 2a, 2d
  • Outcomes 3b
• RET101-104-25: The Hybrid Handbook: Not All Hybrids are Created Equal
  • Outcomes 1a, 1b
  • Outcomes 3a, 3b, 3c
  • Outcomes 4a-4n
• RET101-106-25: Multi-Employer Plans
  • Outcomes 1a, 1b
• RET101-107-26: Introduction and Overview of Retirement Plan Investments
  • Outcomes 1c
  • Outcomes 4l
• RET101-108-25: CAPSA, Guideline No. 6, Pension Plan Prudent Investment Practices Guideline
  • Outcomes 1c
• Report of the Task Force on Target Benefit Plans, CIA, Jun 2015, (excluding sections 4, 5, & Appendices)
  • Outcomes 1a, 1b
  • Outcomes 2d
  • Outcomes 3a, 3b, 3c
• Analysis of Target Benefit Plan Design Options, SOA, Feb 2016, pp. 12-16
  • Outcomes 1a
• RET101-101-25: Integration with Social Security
  • Outcomes 1b
• RET101-103-25: Phased Retirement: An Important Part of the Evolving Retirement Scene
  • Outcomes 1b
  • Outcomes 4h
• Managing Post-Retirement Risks: Strategies for a Secure Retirement, SOA, 2025
  • Outcomes 2a
• RET101-114-25: How Accurately does 70% Final Employment Earnings Replacement Measure Retirement Income (In)Adequacy? Introducing the Living Standards Replacement Rate (LSRR): (sections 3.1, 3.2, 3.4, 4 & 5 and Appendices background only)
  • Outcomes 2c
• RET101-111-25: Risk Management and Public Plan Retirement Systems - Appendices B and C only (remainder is background)
  • Outcomes 2b
• Primer on Retirement Income Strategy Design and Evaluation, SOA Research, Jan 2023, Executive Summary, Sections 1, 2, 5, 6 & Appendix A
  • Outcomes 2a, 2d
  • Outcomes 3b
• RET101-112-25: Private Pensions: Alternative Approaches Could Address Retirement Risks Faced by Workers but Pose Tradeoffs, pp.1-35
  • Outcomes 2a, 2d
• RET101-113-25: The Promise of Defined Ambition Plans: Lessons for the United States
  • Outcomes 2d
  • Outcomes 4a-4n
• RET101-115-25: An Improved Application of the Variable Annuity
  • Outcomes 2d
  • Outcomes 4a-4n
• RET101-116-25: The Case for Collective DC (sections 1-7 only)
  • Outcomes 2d
• Educational Note: Financial Risks Inherent in Multi-Employer Pension Plans and Target Benefit Pension Plans, CIA, May 2011
  • Outcomes 2b
• RET101-111-25: Risk Management and Public Plan Retirement Systems - Appendices A-C only (remainder is background)
  • Outcomes 3a
• Pension Risk Transfer: Evaluating Impact and Barriers for De-Risking Strategies, SOA, Jun 2021 (pp. 8-19 only)
  • Outcomes 3c
  • Outcomes 4n
• RET101-117-25: Implementing Early Retirement Incentive Programs: A Step-by-Step Guide
  • Outcomes 3b
• RET101-118-25: Pension Issues in Mergers and Acquisitions
  • Outcomes 3a
• Embedded Options in Pension Plans: Catalogue of Embedded Options Survey of Prevalence of Embedded Options, SOA, Aug 2011, pp. 1-17
  • Outcomes 3b
• RET101-121-25: The Big Chill
  • Outcomes 4a-4n
• RET101-120-25: Design Matters: Plan Distribution Options
  • Outcomes 4a-4n
• RET101-122-25: Innovations in the Canadian Retirement Landscape: CAAT Pension Plan
  • Outcomes 4a-4n
• RET101-119-25: Ch. 1 (pp. 4-11) and Ch. 5 of Pension Policy: The Search for Better Solutions
  • Outcomes 4e, 4f