CPFA LICENSE EXAM- (CERTIFIED PLAN FIDUCIARY
ADVISOR) 2025/2026 WITH 100% ACCURATE ANSWERS
1. Who is responsible for pursuing monies owed to the retirement plan?
Beneficiary
Plan Administrator
Trustee
Service Provider
2. Describe the importance of the prudence standard in fiduciary
responsibilities.
The prudence standard is irrelevant if the plan is performing well.
The prudence standard requires fiduciaries to act carefully and
thoughtfully, ensuring decisions are well-informed and
documented.
The prudence standard allows fiduciaries to make quick
decisions without documentation.
The prudence standard focuses solely on maximizing returns for
the plan.
3. Describe the role of a plan administrator in relation to ERISA
compliance.
The plan administrator is responsible for ensuring compliance
with ERISA, including filing necessary documents like Form
5500.
The plan administrator serves as a representative for plan
beneficiaries in legal matters.
The plan administrator is responsible for appointing trustees for
, the plan.
The plan administrator manages the investment decisions of the
plan.
4. Describe the role of a plan administrator in relation to participant fee
disclosures.
The plan administrator is responsible for providing participant
fee disclosures to ensure transparency and compliance with
ERISA requirements.
The plan administrator oversees the legal compliance of the
plan's governing documents.
The plan administrator selects and monitors service providers for
the plan.
The plan administrator manages the investment portfolio of the
plan.
5. If a retirement plan's Recordkeeper fails to properly track participant
contributions, what potential consequences could arise for the
fiduciaries involved?
No consequences, as Recordkeepers are not fiduciaries.
Improved compliance with ERISA regulations.
Legal liability for failing to act in the best interests of
participants.
Increased investment returns for participants.
6. To whom can a plan participant go to find out who is the responsible
fiduciary for any given aspect of the plan?
plan administrator
functional fiduciary
, trustee
named fiduciary
7. Who takes on the roles of plan trustee and plan administrator if they are
not specified in the Plan Document?
Plan Sponsor
Regulatory Authorities
Plan Participants
Service Providers
8. If a retirement plan has multiple fiduciaries, what is a critical
responsibility they must collectively uphold?
Minimizing administrative costs regardless of participant interests
Ensuring compliance with tax regulations only
Maximizing profits for the plan sponsors
Acting in the best interests of plan participants and
beneficiaries
9. Who is responsible for providing Participant Benefit Statements under
ERISA?
Investment Manager
Fiduciary Counsel
Plan Administrator
Trustee
10. Describe the role of fiduciaries in a retirement plan as outlined under
ERISA.
Fiduciaries can prioritize their own interests over participants.
, Fiduciaries must act in the best interests of plan participants
and beneficiaries.
Fiduciaries are responsible for managing the plan's investments
only.
Fiduciaries are not required to follow any specific guidelines.
11. What are two key fiduciary duties of a Plan Sponsor under ERISA?
Invest in high-risk assets and ignore plan documents
Delegate all responsibilities to service providers and avoid
oversight
Prudently select and monitor named fiduciaries and maintain
plan records
Focus solely on maximizing returns for the plan
12. An employee benefit plan fiduciary has a duty of prudence, meaning
that
The fiduciary must act according to the plan documents and
applicable law.
The fiduciary must ensure that the plan's investments are
sufficiently diversified to minimize the risk of large losses.
The fiduciary must carry out the duties with the skill,
prudence, and diligence of a prudent person familiar with
such matters.
The fiduciary's actions must be solely in the best interests of the
plan and all of its participants and beneficiaries.
13. If an Independent CPA discovers compliance issues during an audit of
a retirement plan, what should be their next step?
Ignore the issues if they are minor.
, Work with the TPA and recordkeeper to address the
compliance issues.
Change the plan's investment strategy without consulting others.
Report the issues to the plan participants immediately.
14. Which of the following statements regarding a fiduciary's standard of
conduct under ERISA is/are true? I. Fiduciaries must act solely in the
interest of participants and beneficiaries. II. Fiduciaries must follow the
plan document unless such provisions are inconsistent with ERISA. III.
Fiduciaries must diversify the plan assets in order to minimize the risk of
loss unless it is clearly prudent not to do so.
I, II, and III
I only
II and III only
II only
I and III only
15. Describe the role of a 3(21) investment advisor in relation to the
investment policy statement (IPS).
A 3(21) investment advisor is responsible for administrative tasks
related to the plan.
A 3(21) investment advisor only monitors fund performance
without advising on the IPS.
A 3(21) investment advisor provides advice on the IPS and
recommends changes in accordance with it.
A 3(21) investment advisor solely manages the plan's assets
without regard to the IPS.
, 16. What must you verify to determine if your TPA can act as a fiduciary for
the plan's operation?
The service agreement you have with your TPA.
The investment options available in the plan.
The number of participants in the plan.
The fees charged by the TPA.
17. If a Plan Sponsor fails to prudently select and monitor fiduciaries, what
potential consequence could arise?
Increased investment returns for the plan
Legal liability for breaches of fiduciary duty
Enhanced reputation among plan participants
No consequences as long as the plan is funded
18. What is a "fiduciary" under ERISA? Someone who
Acts to make sure the plan is invested fully in employer stock
Acts in the best interest of all plan participants
Acts to ensure the company makes a profit on the plan
Acts for the benefit of highly paid executives
19. Describe the role of a TPA in ensuring compliance with a retirement
plan's governing documents.
A TPA manages the investment portfolio of the plan.
A TPA is responsible for selecting the plan's investment options.
A TPA provides legal advice on fiduciary duties.
A TPA ensures that the plan operates in compliance with the
ADVISOR) 2025/2026 WITH 100% ACCURATE ANSWERS
1. Who is responsible for pursuing monies owed to the retirement plan?
Beneficiary
Plan Administrator
Trustee
Service Provider
2. Describe the importance of the prudence standard in fiduciary
responsibilities.
The prudence standard is irrelevant if the plan is performing well.
The prudence standard requires fiduciaries to act carefully and
thoughtfully, ensuring decisions are well-informed and
documented.
The prudence standard allows fiduciaries to make quick
decisions without documentation.
The prudence standard focuses solely on maximizing returns for
the plan.
3. Describe the role of a plan administrator in relation to ERISA
compliance.
The plan administrator is responsible for ensuring compliance
with ERISA, including filing necessary documents like Form
5500.
The plan administrator serves as a representative for plan
beneficiaries in legal matters.
The plan administrator is responsible for appointing trustees for
, the plan.
The plan administrator manages the investment decisions of the
plan.
4. Describe the role of a plan administrator in relation to participant fee
disclosures.
The plan administrator is responsible for providing participant
fee disclosures to ensure transparency and compliance with
ERISA requirements.
The plan administrator oversees the legal compliance of the
plan's governing documents.
The plan administrator selects and monitors service providers for
the plan.
The plan administrator manages the investment portfolio of the
plan.
5. If a retirement plan's Recordkeeper fails to properly track participant
contributions, what potential consequences could arise for the
fiduciaries involved?
No consequences, as Recordkeepers are not fiduciaries.
Improved compliance with ERISA regulations.
Legal liability for failing to act in the best interests of
participants.
Increased investment returns for participants.
6. To whom can a plan participant go to find out who is the responsible
fiduciary for any given aspect of the plan?
plan administrator
functional fiduciary
, trustee
named fiduciary
7. Who takes on the roles of plan trustee and plan administrator if they are
not specified in the Plan Document?
Plan Sponsor
Regulatory Authorities
Plan Participants
Service Providers
8. If a retirement plan has multiple fiduciaries, what is a critical
responsibility they must collectively uphold?
Minimizing administrative costs regardless of participant interests
Ensuring compliance with tax regulations only
Maximizing profits for the plan sponsors
Acting in the best interests of plan participants and
beneficiaries
9. Who is responsible for providing Participant Benefit Statements under
ERISA?
Investment Manager
Fiduciary Counsel
Plan Administrator
Trustee
10. Describe the role of fiduciaries in a retirement plan as outlined under
ERISA.
Fiduciaries can prioritize their own interests over participants.
, Fiduciaries must act in the best interests of plan participants
and beneficiaries.
Fiduciaries are responsible for managing the plan's investments
only.
Fiduciaries are not required to follow any specific guidelines.
11. What are two key fiduciary duties of a Plan Sponsor under ERISA?
Invest in high-risk assets and ignore plan documents
Delegate all responsibilities to service providers and avoid
oversight
Prudently select and monitor named fiduciaries and maintain
plan records
Focus solely on maximizing returns for the plan
12. An employee benefit plan fiduciary has a duty of prudence, meaning
that
The fiduciary must act according to the plan documents and
applicable law.
The fiduciary must ensure that the plan's investments are
sufficiently diversified to minimize the risk of large losses.
The fiduciary must carry out the duties with the skill,
prudence, and diligence of a prudent person familiar with
such matters.
The fiduciary's actions must be solely in the best interests of the
plan and all of its participants and beneficiaries.
13. If an Independent CPA discovers compliance issues during an audit of
a retirement plan, what should be their next step?
Ignore the issues if they are minor.
, Work with the TPA and recordkeeper to address the
compliance issues.
Change the plan's investment strategy without consulting others.
Report the issues to the plan participants immediately.
14. Which of the following statements regarding a fiduciary's standard of
conduct under ERISA is/are true? I. Fiduciaries must act solely in the
interest of participants and beneficiaries. II. Fiduciaries must follow the
plan document unless such provisions are inconsistent with ERISA. III.
Fiduciaries must diversify the plan assets in order to minimize the risk of
loss unless it is clearly prudent not to do so.
I, II, and III
I only
II and III only
II only
I and III only
15. Describe the role of a 3(21) investment advisor in relation to the
investment policy statement (IPS).
A 3(21) investment advisor is responsible for administrative tasks
related to the plan.
A 3(21) investment advisor only monitors fund performance
without advising on the IPS.
A 3(21) investment advisor provides advice on the IPS and
recommends changes in accordance with it.
A 3(21) investment advisor solely manages the plan's assets
without regard to the IPS.
, 16. What must you verify to determine if your TPA can act as a fiduciary for
the plan's operation?
The service agreement you have with your TPA.
The investment options available in the plan.
The number of participants in the plan.
The fees charged by the TPA.
17. If a Plan Sponsor fails to prudently select and monitor fiduciaries, what
potential consequence could arise?
Increased investment returns for the plan
Legal liability for breaches of fiduciary duty
Enhanced reputation among plan participants
No consequences as long as the plan is funded
18. What is a "fiduciary" under ERISA? Someone who
Acts to make sure the plan is invested fully in employer stock
Acts in the best interest of all plan participants
Acts to ensure the company makes a profit on the plan
Acts for the benefit of highly paid executives
19. Describe the role of a TPA in ensuring compliance with a retirement
plan's governing documents.
A TPA manages the investment portfolio of the plan.
A TPA is responsible for selecting the plan's investment options.
A TPA provides legal advice on fiduciary duties.
A TPA ensures that the plan operates in compliance with the
