RPA 2 – Module 10 (2025/2026 Latest Exam
Prep) | Retirement Planning Study Guide &
Verified Practice Q&A
List the three common objectives for employee benefits communications regardless of
whether print or nonprint media are used - correct answerRegardless of the
technological advancements, the fundamental nature of employee benefits
communications remains the same. Whether print or nonprint media are used, their
objectives do not change and can be classified into three areas:
(a) Adhere to statutory reporting and disclosure requirements.
(b) Support employee benefits cost-containment strategies.
(c) Support human resource recruitment and retention objectives
Identify the key times when employers commonly communicate with their employees
regarding employee benefits. - correct answerThere are several key times when
employers commonly communicate with their employees regarding employee benefit
programs. Among these key times are:
(a) As new hires at employment
(b) As part of the open enrollment communication process
(c) As part of the ongoing interaction when employees experience a life event or make
routine changes to their benefit programs
(d) At the time that the employee terminates employment
(e) As a retiree if the employee continues to be eligible for certain benefits.
In addition to the times when employees routinely interact with their employers
regarding employee benefits, why would an employer initiate contact with an employee
about benefit programs? - correct answerIn addition to the times when employees
routinely interact with their employers regarding employee benefits, employers may
choose to initiate contact with employees regarding employee benefit programs. An
employer may initiate contact for various reasons. One of the primary reasons for
initiating contact may be to enhance employee understanding and appreciation of
employee benefit programs. Especially since employers have placed more responsibility
on employees for managing risk with participant-directed defined contribution (DC)
plans, the employer has a stake in ensuring that employees understand plan features
and make the best use of these programs. An employer may initiate contact to provide
investment education. Efforts to improve knowledge, understanding and outcomes with
these plans can actually be beneficial to the employer, in demonstrating that the
employer as a plan sponsor, is fulfilling fiduciary responsibilities.
, Who is considered a fiduciary under ERISA? - correct answerA person (or corporation)
is considered a fiduciary under ERISA if that person exercises any discretionary
authority or control over the management of the plan, exercises any authority or control
over assets held under the plan or the disposition of plan assets, renders investment
advice for direct or indirect compensation (or has any authority or responsibility to do
so), or has any discretionary authority or responsibility in the administration of the plan.
Clearly, the trustee of a plan is a fiduciary. So also are officers and directors of a
corporation who have responsibility for certain fiduciary functions—for example, the
appointment and retention of trustees or investment managers or the appointment and
monitoring of an investment advice provider. On the other hand, individuals whose
duties are purely ministerial (e.g., applying rules of eligibility and vesting) are not
fiduciaries.
Under the law, what responsibilities does a fiduciary possess? - correct answerUnder
the law, a fiduciary possesses several responsibilities. A fiduciary is required to
discharge all duties solely in the interest of participants and beneficiaries and for the
exclusive purpose of providing plan benefits and defraying reasonable administrative
expenses. In addition, a fiduciary is charged with using the care, skill, prudence and
diligence that a prudent person who is familiar with such matters would use under the
circumstances then prevailing—a standard that has come to be called the prudent
expert rule. A fiduciary also is responsible for diversifying investments so as to minimize
the risk of large losses, unless it is clearly prudent not to diversify. Finally, the fiduciary
must conform with the documents governing the plan and must invest only in assets
subject to the jurisdiction of U.S. courts. This latter requirement does not preclude
investing in international securities; it simply requires that the assets be held in a
manner such that they are subject to the jurisdiction of U.S. courts.
Who are considered disqualified persons for the purposes of the law involving prohibited
transactions? - correct answerBoth labor law (Title I of ERISA) and the Internal
Revenue Code (IRC) prohibit certain transactions between the plan and disqualified
persons. A disqualified person is broadly defined to include any plan fiduciary; a person
providing service to the plan; any employer or employee organization whose employees
or members are covered by the plan; a direct or indirect owner of 50% or more of the
business interest of the employer; a relative of any of the above; an officer, director and
certain highly compensated employees (HCEs); or a person having 10% or more of the
ownership interest in any of the preceding. Under ERISA, an employee also is
considered to be a party in interest; an employee, however, is not considered to be a
disqualified person.
What transactions between the plan and a party in interest or a disqualified person are
prohibited? - correct answerThe following transactions between the plan and a party in
interest or a disqualified person are prohibited: • The sale, exchange or leasing of
property • Lending money or extending credit (including funding the plan by contributing
debt securities) • Furnishing goods, services or facilities • A transfer or use of plan
assets • The acquisition of qualifying employer securities and real property in excess of
Prep) | Retirement Planning Study Guide &
Verified Practice Q&A
List the three common objectives for employee benefits communications regardless of
whether print or nonprint media are used - correct answerRegardless of the
technological advancements, the fundamental nature of employee benefits
communications remains the same. Whether print or nonprint media are used, their
objectives do not change and can be classified into three areas:
(a) Adhere to statutory reporting and disclosure requirements.
(b) Support employee benefits cost-containment strategies.
(c) Support human resource recruitment and retention objectives
Identify the key times when employers commonly communicate with their employees
regarding employee benefits. - correct answerThere are several key times when
employers commonly communicate with their employees regarding employee benefit
programs. Among these key times are:
(a) As new hires at employment
(b) As part of the open enrollment communication process
(c) As part of the ongoing interaction when employees experience a life event or make
routine changes to their benefit programs
(d) At the time that the employee terminates employment
(e) As a retiree if the employee continues to be eligible for certain benefits.
In addition to the times when employees routinely interact with their employers
regarding employee benefits, why would an employer initiate contact with an employee
about benefit programs? - correct answerIn addition to the times when employees
routinely interact with their employers regarding employee benefits, employers may
choose to initiate contact with employees regarding employee benefit programs. An
employer may initiate contact for various reasons. One of the primary reasons for
initiating contact may be to enhance employee understanding and appreciation of
employee benefit programs. Especially since employers have placed more responsibility
on employees for managing risk with participant-directed defined contribution (DC)
plans, the employer has a stake in ensuring that employees understand plan features
and make the best use of these programs. An employer may initiate contact to provide
investment education. Efforts to improve knowledge, understanding and outcomes with
these plans can actually be beneficial to the employer, in demonstrating that the
employer as a plan sponsor, is fulfilling fiduciary responsibilities.
, Who is considered a fiduciary under ERISA? - correct answerA person (or corporation)
is considered a fiduciary under ERISA if that person exercises any discretionary
authority or control over the management of the plan, exercises any authority or control
over assets held under the plan or the disposition of plan assets, renders investment
advice for direct or indirect compensation (or has any authority or responsibility to do
so), or has any discretionary authority or responsibility in the administration of the plan.
Clearly, the trustee of a plan is a fiduciary. So also are officers and directors of a
corporation who have responsibility for certain fiduciary functions—for example, the
appointment and retention of trustees or investment managers or the appointment and
monitoring of an investment advice provider. On the other hand, individuals whose
duties are purely ministerial (e.g., applying rules of eligibility and vesting) are not
fiduciaries.
Under the law, what responsibilities does a fiduciary possess? - correct answerUnder
the law, a fiduciary possesses several responsibilities. A fiduciary is required to
discharge all duties solely in the interest of participants and beneficiaries and for the
exclusive purpose of providing plan benefits and defraying reasonable administrative
expenses. In addition, a fiduciary is charged with using the care, skill, prudence and
diligence that a prudent person who is familiar with such matters would use under the
circumstances then prevailing—a standard that has come to be called the prudent
expert rule. A fiduciary also is responsible for diversifying investments so as to minimize
the risk of large losses, unless it is clearly prudent not to diversify. Finally, the fiduciary
must conform with the documents governing the plan and must invest only in assets
subject to the jurisdiction of U.S. courts. This latter requirement does not preclude
investing in international securities; it simply requires that the assets be held in a
manner such that they are subject to the jurisdiction of U.S. courts.
Who are considered disqualified persons for the purposes of the law involving prohibited
transactions? - correct answerBoth labor law (Title I of ERISA) and the Internal
Revenue Code (IRC) prohibit certain transactions between the plan and disqualified
persons. A disqualified person is broadly defined to include any plan fiduciary; a person
providing service to the plan; any employer or employee organization whose employees
or members are covered by the plan; a direct or indirect owner of 50% or more of the
business interest of the employer; a relative of any of the above; an officer, director and
certain highly compensated employees (HCEs); or a person having 10% or more of the
ownership interest in any of the preceding. Under ERISA, an employee also is
considered to be a party in interest; an employee, however, is not considered to be a
disqualified person.
What transactions between the plan and a party in interest or a disqualified person are
prohibited? - correct answerThe following transactions between the plan and a party in
interest or a disqualified person are prohibited: • The sale, exchange or leasing of
property • Lending money or extending credit (including funding the plan by contributing
debt securities) • Furnishing goods, services or facilities • A transfer or use of plan
assets • The acquisition of qualifying employer securities and real property in excess of
