RPA1 Exam Questions and Answers Already Passed Latest Update 2025-2026
Registered Pension Plan - Answersrefers to an arrangement offered by an employer or union to
provide retirement benefits to plan members in the form of periodic payments during retirement.
Defined benefit (DB) pension plan - Answersrefers to a registered pension plan that provides
benefits based on the plan member's years of service and earnings.
Defined contribution (DC) pension plan - Answersrefers to a registered pension plan that
provides benefits based on the amount accumulated in the plan member's account from the
contributions made by the employer and the employee, if it is a contributory plan.
Career average or final earnings plan - Answersrefers to the formula used to determine the
retirement benefits to be provided from a defined benefit pension plan. A formula based on
career average earnings will base payments on the average annual earnings spanning the
employee's career as a plan member; whereas a final earnings plan will base the payments on
the final years of service (typically 3-5 years).
Multi-employer pension plan (MEPP) - Answersrefers to a plan to which two or more, usually
non-affiliated, employers contribute. Employers who are part of the MEPP, allow employees to
benefit from pension entitlement that is based on the aggregate of pension credits earned while
employed with various employer members of the plan.
Target benefit plan - Answersrefers to a type of pension plan that is designed to provide a
defined benefit but is similar to a defined contribution plan in that it has fixed contributions.
Adequacy - Answersrefers to the target level of retirement income to be provided through an
employer plan, that is intended to supplement government programs and individual savings to
provide employees with a reasonable income during retirement.
Equity - Answersrefers to pension plans being equitable among members with different
employment histories; however, several different concepts of equity exist.
Year's maximum pensionable earnings (YMPE) - Answersrefers to the year's maximum
pensionable earnings, as defined under the Canada Pension Plan (CPP).
Bridge benefits - Answersrefers to special benefits provided to pension plan member's who take
a reduced pension, prior to reaching age 65. This payment supplements the pension benefits
until the plan member is eligible to start receiving CPP or QPP retirement benefits.
Capital accumulation plan (CAP) - Answersrefers to a tax-assisted registered savings plan that
offers a level of flexibility to plan members for making investment decisions. Typically, with DC
pension plans, Group RRSPs and DPSPs, the employer will offer options to employees with
regards to the investment of plan assets. This allows plan members to take increased risk or
invest more conservatively, depending on their individual risk tolerance and objectives.
,Pension credit - Answersrefers to a non-refundable tax credit that is applied to the first $2,000
of eligible pension income that an individual receives each year. The taxpayer can claim a tax
credit of the minimum federal tax rate (15%) of the first $2,000 of pension income, for a
maximum amount of $300, regardless of the age of the taxpayer, or minimum age of 65 for
RRSPs, DPSPs and RRIFs.
Past service benefits - Answersrefers to the provision of pension credits to employees for
service before the establishment of a new DB pension plan.
Pensionable/credited service - Answersrefers to the time that a plan member is calculated as
being an active member of the pension plan.
Contributory and non-contributory plan - Answersrefers to the requirement to make
contributions to the pension plan. In a non-contributory plan, the employer is solely responsible
for making all contributions to the plan; whereas a contributory plan allows, or requires, the plan
member to make contributions as well as the employer.
50% rule - Answersrefers to the requirement for an employer to provide at least 50% of the
pension contributions to a defined benefit pension plan. If the plan member's contributions plus
earned interest or investment income equal more than 50% of the commuted value, the excess
is refunded to the member.
Normal retirement - Answersrefers to the age at which a plan member can collect a full pension
from the plan.
Early retirement - Answersrefers to the age at which a plan member can begin to collect a
reduced pension from the plan.
Phased retirement - Answersrefers to an arrangement that allows an employee who is
approaching retirement age to continue working with a reduced workload and begin collected a
reduced pension until he or she fully retires from the workforce.
Postponed retirement - Answersrefers to a deferral of pension benefits when a plan member
continues to work beyond the normal retirement age.
Normal, optional form of pension - Answersrefers to the options available to a plan member at
the time pension payments commence. The plan member may select a guaranteed pension
(such as 5 or 10 years) or a joint and survivor pension to guarantee that income is provided to a
surviving spouse.
Joint and survivor pension - Answersrefers to the continuation of pension payments provided to
the eligible spouse following the death of the plan member.
Preretirement death benefit - Answersrefers to the commuted value of a pension that is
provided to an eligible spouse or beneficiary of a deceased plan member who was not in receipt
, of a pension from the plan at the time of death.
Postretirement death benefit - Answersrefers to the benefits payable to an eligible spouse or
beneficiary of a deceased plan member who was collecting pension benefits from the plan at
the time of death. This will vary based on the type of plan and the options selected by the plan
member at the time the pension payments commenced.
Locking-in - Answersrefers to the restrictions on registered pension plans that prohibit plan
members from withdrawing the funds prior to retirement.
Reciprocal transfer agreement - Answersrefers to the terms and conditions under which a plan
member can transfer pensionable service or funds from one registered pension to another
Indexation - Answersrefers to an annual pension increase to account for the rising cost of living.
Ad hoc adjustments - Answersrefers to a pension increase on an irregular basis to compensate
for the rising cost of living.
flat benefit plan - Answersmultiplies years of service by a flat dollar amount to calculate pension
benefits, rather than a calculation based on plan member's earnings. For example, a benefit
formula of $40 per month per year of service for an employee with 25 years of pensionable
service would provide an annual pension of $12,000 (calculated as $40 x 25 x 12).
best average earnings plan - Answersbases calculations on the average earnings during the
employee's best earning years (such as the five highest earning years). Since some employees
reduce their working hours towards the end of their career, they may experience reduced
incomes in the years immediately preceding retirement. A best average earnings plan can
eliminate the potential risk from this scenario by focusing on the employee's highest earning
years.
Registered Retirement Savings Plan (RRSP) - Answersrefers to a vehicle used to help individuals
save for retirement by offering tax assistance for contributions made to the plan and allowing
funds to grow tax-sheltered until withdrawn.
Group RRSP - Answersrefers to a collection of individual RRSPs established by the employer to
facilitate employee contributions to an RRSP, by way of payroll deductions
Canada Revenue Agency (CRA) - Answersrefers to a Canadian federal agency that administers
tax laws for the Government of Canada and for most provinces and territories and various
social and economic benefit and incentive programs delivered through the tax system.
Income Tax Act (ITA) - Answersrefers to the legislation that defines terms of administration and
enforcement with compliance responsibilities assigned to the CRA.
Pension standards legislation - Answersrefers to legislation that outlines minimum standards
relating to plan member rights under an RPP.
Registered Pension Plan - Answersrefers to an arrangement offered by an employer or union to
provide retirement benefits to plan members in the form of periodic payments during retirement.
Defined benefit (DB) pension plan - Answersrefers to a registered pension plan that provides
benefits based on the plan member's years of service and earnings.
Defined contribution (DC) pension plan - Answersrefers to a registered pension plan that
provides benefits based on the amount accumulated in the plan member's account from the
contributions made by the employer and the employee, if it is a contributory plan.
Career average or final earnings plan - Answersrefers to the formula used to determine the
retirement benefits to be provided from a defined benefit pension plan. A formula based on
career average earnings will base payments on the average annual earnings spanning the
employee's career as a plan member; whereas a final earnings plan will base the payments on
the final years of service (typically 3-5 years).
Multi-employer pension plan (MEPP) - Answersrefers to a plan to which two or more, usually
non-affiliated, employers contribute. Employers who are part of the MEPP, allow employees to
benefit from pension entitlement that is based on the aggregate of pension credits earned while
employed with various employer members of the plan.
Target benefit plan - Answersrefers to a type of pension plan that is designed to provide a
defined benefit but is similar to a defined contribution plan in that it has fixed contributions.
Adequacy - Answersrefers to the target level of retirement income to be provided through an
employer plan, that is intended to supplement government programs and individual savings to
provide employees with a reasonable income during retirement.
Equity - Answersrefers to pension plans being equitable among members with different
employment histories; however, several different concepts of equity exist.
Year's maximum pensionable earnings (YMPE) - Answersrefers to the year's maximum
pensionable earnings, as defined under the Canada Pension Plan (CPP).
Bridge benefits - Answersrefers to special benefits provided to pension plan member's who take
a reduced pension, prior to reaching age 65. This payment supplements the pension benefits
until the plan member is eligible to start receiving CPP or QPP retirement benefits.
Capital accumulation plan (CAP) - Answersrefers to a tax-assisted registered savings plan that
offers a level of flexibility to plan members for making investment decisions. Typically, with DC
pension plans, Group RRSPs and DPSPs, the employer will offer options to employees with
regards to the investment of plan assets. This allows plan members to take increased risk or
invest more conservatively, depending on their individual risk tolerance and objectives.
,Pension credit - Answersrefers to a non-refundable tax credit that is applied to the first $2,000
of eligible pension income that an individual receives each year. The taxpayer can claim a tax
credit of the minimum federal tax rate (15%) of the first $2,000 of pension income, for a
maximum amount of $300, regardless of the age of the taxpayer, or minimum age of 65 for
RRSPs, DPSPs and RRIFs.
Past service benefits - Answersrefers to the provision of pension credits to employees for
service before the establishment of a new DB pension plan.
Pensionable/credited service - Answersrefers to the time that a plan member is calculated as
being an active member of the pension plan.
Contributory and non-contributory plan - Answersrefers to the requirement to make
contributions to the pension plan. In a non-contributory plan, the employer is solely responsible
for making all contributions to the plan; whereas a contributory plan allows, or requires, the plan
member to make contributions as well as the employer.
50% rule - Answersrefers to the requirement for an employer to provide at least 50% of the
pension contributions to a defined benefit pension plan. If the plan member's contributions plus
earned interest or investment income equal more than 50% of the commuted value, the excess
is refunded to the member.
Normal retirement - Answersrefers to the age at which a plan member can collect a full pension
from the plan.
Early retirement - Answersrefers to the age at which a plan member can begin to collect a
reduced pension from the plan.
Phased retirement - Answersrefers to an arrangement that allows an employee who is
approaching retirement age to continue working with a reduced workload and begin collected a
reduced pension until he or she fully retires from the workforce.
Postponed retirement - Answersrefers to a deferral of pension benefits when a plan member
continues to work beyond the normal retirement age.
Normal, optional form of pension - Answersrefers to the options available to a plan member at
the time pension payments commence. The plan member may select a guaranteed pension
(such as 5 or 10 years) or a joint and survivor pension to guarantee that income is provided to a
surviving spouse.
Joint and survivor pension - Answersrefers to the continuation of pension payments provided to
the eligible spouse following the death of the plan member.
Preretirement death benefit - Answersrefers to the commuted value of a pension that is
provided to an eligible spouse or beneficiary of a deceased plan member who was not in receipt
, of a pension from the plan at the time of death.
Postretirement death benefit - Answersrefers to the benefits payable to an eligible spouse or
beneficiary of a deceased plan member who was collecting pension benefits from the plan at
the time of death. This will vary based on the type of plan and the options selected by the plan
member at the time the pension payments commenced.
Locking-in - Answersrefers to the restrictions on registered pension plans that prohibit plan
members from withdrawing the funds prior to retirement.
Reciprocal transfer agreement - Answersrefers to the terms and conditions under which a plan
member can transfer pensionable service or funds from one registered pension to another
Indexation - Answersrefers to an annual pension increase to account for the rising cost of living.
Ad hoc adjustments - Answersrefers to a pension increase on an irregular basis to compensate
for the rising cost of living.
flat benefit plan - Answersmultiplies years of service by a flat dollar amount to calculate pension
benefits, rather than a calculation based on plan member's earnings. For example, a benefit
formula of $40 per month per year of service for an employee with 25 years of pensionable
service would provide an annual pension of $12,000 (calculated as $40 x 25 x 12).
best average earnings plan - Answersbases calculations on the average earnings during the
employee's best earning years (such as the five highest earning years). Since some employees
reduce their working hours towards the end of their career, they may experience reduced
incomes in the years immediately preceding retirement. A best average earnings plan can
eliminate the potential risk from this scenario by focusing on the employee's highest earning
years.
Registered Retirement Savings Plan (RRSP) - Answersrefers to a vehicle used to help individuals
save for retirement by offering tax assistance for contributions made to the plan and allowing
funds to grow tax-sheltered until withdrawn.
Group RRSP - Answersrefers to a collection of individual RRSPs established by the employer to
facilitate employee contributions to an RRSP, by way of payroll deductions
Canada Revenue Agency (CRA) - Answersrefers to a Canadian federal agency that administers
tax laws for the Government of Canada and for most provinces and territories and various
social and economic benefit and incentive programs delivered through the tax system.
Income Tax Act (ITA) - Answersrefers to the legislation that defines terms of administration and
enforcement with compliance responsibilities assigned to the CRA.
Pension standards legislation - Answersrefers to legislation that outlines minimum standards
relating to plan member rights under an RPP.
