CEBS - RPA 2 EXAM Questions Latest
update 2025/2026 GRADED A+
Premature distributions from IRAs exempt from penalty if: - correct answerDistribution
occurred b/c of IRS levy on account to pay taxes.
IRA qualified distributions include: - correct answerAttained age 59 1/2; disabled; died
and payment made to beneficiary or estate; pay first-time home buyer expenses, not to
exceed $10k.
Term used to describe condition that occurs b/c of different accrual patterns when
traditional DB plan converted to cash balance plan: - correct answerPension wear away
Section 409A - correct answerIRC mandate that income from deferred comp
arrangements not be deferred beyond year in which comp is earned.
Qualified retirement plans required to have fidelity bond covering what %? - correct
answer10%
Dollar cost averaging - correct answerInvolves investing the same amount of money on
periodic basis, whether over- or under-priced.
Vesting provisions of executive retirement arrangements: - correct answervaries
depending on intent of executive arrangement
Excess contribution to IRA subject to nondeductible excise tax of: - correct answer6%
Nonworking spouse may establish IRA using what types of payment as basis for
eligibility? - correct answerEarned income of working spouse
Fiduciary liable for duly appointed and monitored investment mgr if performance of plan
below benchmark? - correct answerNot liable since investment mgmt svcs delegated
Typical range for % of earnings credited under % of earnings per year formula? - correct
answer1% to 1.25%
Tax treatment of NQSO (NQ stock options) for ER: - correct answerER gets corporate
income tax deduction for amount of comp income EE realizes at exercise of option.
Penalty for failure to make required distribution of at least correct amount from qualified
retirement plan: - correct answerNondeductible excise tax of 50%
, EEs w/drawing contributions from SIMPLE IRA during initial two-year period, subject to
penalty of: - correct answer25%
When qualified plan hold ER securities, max amount for fidelity bond is: - correct
answerIncreased by a significant amount
Taxable amount received before 59 1/2 from qualified plan subject to additional penalty
of: - correct answer10%
Surge in investments returns on accumulated pension assets will have what effect on
projected plan costs? - correct answerReduction effect
Unfunded plan maintained by ER for purpose of providing deferred comp for a select
group of mgmt or HCEs is: - correct answerTop-hat plan
SERP participation criterion most frequently used: - correct answerPosition and mgmt
status
Requirement of IRC integration w/ Social Security: - correct answerThat the combined
retirement income does not discriminate in favor of HCEs on % basis
Retirement plan committee charged w/: - correct answerMaking all decisions necessary
regarding administration of retirement plan
Highest annual return and greatest volatility? - correct answerCommon stocks
Normal retirement age 65, but not to occur later than: - correct answerFifth anniversary
participant's date of initial participation
Theory of income taxation that imposes current tax liability on taxpayers who receive
something of reasonable value: - correct answerDoctrine of economic benefit
Wage-related formula technique to reduce impact of postretirement inflation on pension
income: - correct answerMeasured on the basis of current wage measures to adjust
benefits.
If fail to comply w/ Sec 404(c) - correct answerStatutory relief from fiduciary liability not
available
Traditional DB plan (often final avg pay) or cash balance plan combined, offering
participants both options: - correct answerMinimum balance pension plan
SPD to be provided w/in how many days: - correct answer90
Factor w/ highest impact in Black-Scholes pricing model: - correct answerExpected
volatility of underlying stock's market price
update 2025/2026 GRADED A+
Premature distributions from IRAs exempt from penalty if: - correct answerDistribution
occurred b/c of IRS levy on account to pay taxes.
IRA qualified distributions include: - correct answerAttained age 59 1/2; disabled; died
and payment made to beneficiary or estate; pay first-time home buyer expenses, not to
exceed $10k.
Term used to describe condition that occurs b/c of different accrual patterns when
traditional DB plan converted to cash balance plan: - correct answerPension wear away
Section 409A - correct answerIRC mandate that income from deferred comp
arrangements not be deferred beyond year in which comp is earned.
Qualified retirement plans required to have fidelity bond covering what %? - correct
answer10%
Dollar cost averaging - correct answerInvolves investing the same amount of money on
periodic basis, whether over- or under-priced.
Vesting provisions of executive retirement arrangements: - correct answervaries
depending on intent of executive arrangement
Excess contribution to IRA subject to nondeductible excise tax of: - correct answer6%
Nonworking spouse may establish IRA using what types of payment as basis for
eligibility? - correct answerEarned income of working spouse
Fiduciary liable for duly appointed and monitored investment mgr if performance of plan
below benchmark? - correct answerNot liable since investment mgmt svcs delegated
Typical range for % of earnings credited under % of earnings per year formula? - correct
answer1% to 1.25%
Tax treatment of NQSO (NQ stock options) for ER: - correct answerER gets corporate
income tax deduction for amount of comp income EE realizes at exercise of option.
Penalty for failure to make required distribution of at least correct amount from qualified
retirement plan: - correct answerNondeductible excise tax of 50%
, EEs w/drawing contributions from SIMPLE IRA during initial two-year period, subject to
penalty of: - correct answer25%
When qualified plan hold ER securities, max amount for fidelity bond is: - correct
answerIncreased by a significant amount
Taxable amount received before 59 1/2 from qualified plan subject to additional penalty
of: - correct answer10%
Surge in investments returns on accumulated pension assets will have what effect on
projected plan costs? - correct answerReduction effect
Unfunded plan maintained by ER for purpose of providing deferred comp for a select
group of mgmt or HCEs is: - correct answerTop-hat plan
SERP participation criterion most frequently used: - correct answerPosition and mgmt
status
Requirement of IRC integration w/ Social Security: - correct answerThat the combined
retirement income does not discriminate in favor of HCEs on % basis
Retirement plan committee charged w/: - correct answerMaking all decisions necessary
regarding administration of retirement plan
Highest annual return and greatest volatility? - correct answerCommon stocks
Normal retirement age 65, but not to occur later than: - correct answerFifth anniversary
participant's date of initial participation
Theory of income taxation that imposes current tax liability on taxpayers who receive
something of reasonable value: - correct answerDoctrine of economic benefit
Wage-related formula technique to reduce impact of postretirement inflation on pension
income: - correct answerMeasured on the basis of current wage measures to adjust
benefits.
If fail to comply w/ Sec 404(c) - correct answerStatutory relief from fiduciary liability not
available
Traditional DB plan (often final avg pay) or cash balance plan combined, offering
participants both options: - correct answerMinimum balance pension plan
SPD to be provided w/in how many days: - correct answer90
Factor w/ highest impact in Black-Scholes pricing model: - correct answerExpected
volatility of underlying stock's market price
