Certified Trust and Fiduciary Advisor (CTFA) — Question 1

This is a type of employee benefit plan wherein the employer allocates a certain amount of money and then the employee spends that money for benefits selected from a menu covering everything from child care to health and life insurance to retirement benefits.

Answer options

• A. Flexible benefit plan
• B. Cafeteria plan
• C. Short-term financial plan
• D. Both of the above are one and the same

Correct answer: D

Explanation

The correct answer is D because both a Flexible benefit plan and a Cafeteria plan refer to the same concept where employees choose benefits within a fixed budget. Options A and B are valid terms for the same type of plan but do not capture the equivalence stated in option D. Option C is unrelated to the described employee benefit structure.