CPFA LICENSE COMPREHENSIVE TEST
PAPER 2026 COMPLETE ANSWERS
ACCURATE
⫸ What does the Exclusive Purpose Rule Require? Answer: Acting
solely in the interest of participants and beneficiaries
⫸ Why Keep meeting minutes for plan committees? Answer: To
document fiduciary decision-making and oversight
⫸ What document outlines investment objectives? Answer: Investment
Policy Statement (IPS)
⫸ Which plan type allows employer contributions only? Answer: SEP
IRA
⫸ What is the primary goal of plan design? Answer: Align sponsor
objectives with participant outcomes
⫸ QDIA Answer: Qualified Default Investment Alternative; provides
fiduciary protection for defaulted participants
⫸ Diversification Answer: Which principle minimized risk of large
losses
, ⫸ Form 5500 Answer: Which form reports annual plan operations
⫸ What is the primary goal for participant communication Answer:
ensure informed decision making about plan benefits
⫸ Section 404 Answer: Which ERISA section outlines fiduciary duties
⫸ What is the Prudence Rule Answer: Act with care, skill, prudence and
diligence
⫸ What does diversification require? Answer: Spread investment to
minimize risk
⫸ Who is always considered a fiduciary? Answer: Plan sponsor, trustee,
administrator
⫸ Are fiduciaries personally liable for breaches? Answer: Yes,
fiduciaries can be held personally liable
⫸ What is the purpose of the IPS Answer: To define investment
objectives and monitoring process
⫸ What is the role of the a plan administrator? Answer: Ensure ERISA
compliance and disclosures
PAPER 2026 COMPLETE ANSWERS
ACCURATE
⫸ What does the Exclusive Purpose Rule Require? Answer: Acting
solely in the interest of participants and beneficiaries
⫸ Why Keep meeting minutes for plan committees? Answer: To
document fiduciary decision-making and oversight
⫸ What document outlines investment objectives? Answer: Investment
Policy Statement (IPS)
⫸ Which plan type allows employer contributions only? Answer: SEP
IRA
⫸ What is the primary goal of plan design? Answer: Align sponsor
objectives with participant outcomes
⫸ QDIA Answer: Qualified Default Investment Alternative; provides
fiduciary protection for defaulted participants
⫸ Diversification Answer: Which principle minimized risk of large
losses
, ⫸ Form 5500 Answer: Which form reports annual plan operations
⫸ What is the primary goal for participant communication Answer:
ensure informed decision making about plan benefits
⫸ Section 404 Answer: Which ERISA section outlines fiduciary duties
⫸ What is the Prudence Rule Answer: Act with care, skill, prudence and
diligence
⫸ What does diversification require? Answer: Spread investment to
minimize risk
⫸ Who is always considered a fiduciary? Answer: Plan sponsor, trustee,
administrator
⫸ Are fiduciaries personally liable for breaches? Answer: Yes,
fiduciaries can be held personally liable
⫸ What is the purpose of the IPS Answer: To define investment
objectives and monitoring process
⫸ What is the role of the a plan administrator? Answer: Ensure ERISA
compliance and disclosures
