Which of the following could change due to the aging workforce within Age-Weighted Profit Sharing Plans?

In Age-Weighted Profit Sharing Plans, the contributions made to participants are based on age and compensation. As the workforce ages, the age factor allocations come into play. Older employees generally receive larger contributions under such plans due to the design that aims to provide more significant benefits as employees near retirement age.

This aligns with the plan’s objective to help older workers accumulate sufficient retirement savings, recognizing that they have fewer years to prepare for retirement compared to younger employees. Therefore, the aging workforce directly affects the contributions made to older participants, making the statement about age factor allocations correct.

In contrast, while the base funding percentage for all employees might be stable, it usually doesn’t fluctuate due to workforce age alone. The overall number of plans offered by the employer and legislative requirements are generally influenced by broader organizational strategies or changes in law, rather than the specific dynamics of the employee age demographics related to profit-sharing.