What factor is primarily considered in an age-weighted profit sharing plan?

An age-weighted profit sharing plan is designed to allocate contributions in a way that takes into account the ages of participants. This means that older participants, who are generally closer to retirement, tend to receive a larger share of the profit-sharing contributions compared to younger participants. The rationale behind this design is to provide an incentive and aid in retirement savings for those who may have less time to accumulate savings before retirement age.

In this type of plan, the contributions are typically weighted more heavily towards those in older age brackets because they have fewer years left until retirement and may therefore need a larger contribution to meet their retirement goals. The benefit of this approach is that it aligns with the needs of participants at different life stages, especially as retirement nears.

The other factors mentioned, such as years of service, salary level, and size of the employer's business, may play a role in different types of retirement plans, but they do not specifically drive the allocation method of age-weighted profit sharing plans. The primary focus is indeed on the age of participants, making it the correct answer.