CPFA TEST PAPER 2026 FULL QUESTIONS
AND CORRECT ANSWERS EXPERT REVIEW
RATED A+
⩥ Business structure and type: Answer: 1. What type of business entity
is the plan sponsor?
2. What does the census data look like for the employer?
⩥ Related company ownership:. Answer: 1. Who are the owners of the
business and what percent do they own? (family members, what
relationship?)
2. Do the owners of the current business or the current business own any
other businesses?
3. Do the family members of the owners of the current business own any
other businesses?
⩥ Business cash flow and budget:. Answer: 1. What is the contribution
budget available?
2. Does the business have stable cash flow?
⩥ Advisors can add value by pointing out the advantages and
disadvantages of different eligibility requirements. Examples:. Answer:
1. Do your current plan eligibility provisions work well with your plan
goals?
,2. Do you know why they were selected?
3. Can your HR staff and/or payroll system effectively handle employees
who are immediately eligible for the plan?
4. Would staff be able to process immediate entry into the plan along
with automatic enrollment?
5. Are you comfortable making matching contributions every payroll
period?
6. Do you have a lot of turnover?
7. Would a one-year wait help manage the impact of that turnover?
8. Would a requirement to work on the last day of the plan year help
manage the cost of turnover?
9. Are there employee groups that you would like to exclude from the
plan if it is possible to do?
⩥ Contributions can have a major impact in. Answer: supporting plan
goals as well as plan costs.
⩥ Advisors should be familiar with different contribution provisions and
consider the following when designing contribution provisions:. Answer:
1. Is there a philosophy on making employer contributions?
2. Is the objective to maximize contributions to the principal employees?
3. What is the objective and budget for non-principal employees?
4. Is there one or more group of employees who may not need the plan
or who are unlikely to participate in the plan?
, 5. How important is it that your employees be on track for an adequate
retirement income?
6. What is the company's cash flow?
7. What is the approximate budget for plan contributions?
⩥ Vesting schedules add to a. Answer: plan's administrative complexity
for record keepers and TPAs, and can add to the plan's cost. However,
employers often consider forfeitures advantageous for cost savings and
therefore may prefer vesting schedules that do not vest participants
100% immediately.
⩥ It is important to remind employers that not all their contributions are
subject to. Answer: vesting, especially safe harbor contributions that are
always 100% vested.
⩥ Advisors should discuss loan and hardship withdrawal provisions
with. Answer: plan sponsors and plan fiduciaries.
Because these provisions are optional, plans whose goal is for
participants to save for retirement do not have to offer them. However,
many participants will not defer if they believe they cannot get their
money out until they retire or leave the company.
⩥ Loans and hardships have a track record of. Answer: encouraging
participation
AND CORRECT ANSWERS EXPERT REVIEW
RATED A+
⩥ Business structure and type: Answer: 1. What type of business entity
is the plan sponsor?
2. What does the census data look like for the employer?
⩥ Related company ownership:. Answer: 1. Who are the owners of the
business and what percent do they own? (family members, what
relationship?)
2. Do the owners of the current business or the current business own any
other businesses?
3. Do the family members of the owners of the current business own any
other businesses?
⩥ Business cash flow and budget:. Answer: 1. What is the contribution
budget available?
2. Does the business have stable cash flow?
⩥ Advisors can add value by pointing out the advantages and
disadvantages of different eligibility requirements. Examples:. Answer:
1. Do your current plan eligibility provisions work well with your plan
goals?
,2. Do you know why they were selected?
3. Can your HR staff and/or payroll system effectively handle employees
who are immediately eligible for the plan?
4. Would staff be able to process immediate entry into the plan along
with automatic enrollment?
5. Are you comfortable making matching contributions every payroll
period?
6. Do you have a lot of turnover?
7. Would a one-year wait help manage the impact of that turnover?
8. Would a requirement to work on the last day of the plan year help
manage the cost of turnover?
9. Are there employee groups that you would like to exclude from the
plan if it is possible to do?
⩥ Contributions can have a major impact in. Answer: supporting plan
goals as well as plan costs.
⩥ Advisors should be familiar with different contribution provisions and
consider the following when designing contribution provisions:. Answer:
1. Is there a philosophy on making employer contributions?
2. Is the objective to maximize contributions to the principal employees?
3. What is the objective and budget for non-principal employees?
4. Is there one or more group of employees who may not need the plan
or who are unlikely to participate in the plan?
, 5. How important is it that your employees be on track for an adequate
retirement income?
6. What is the company's cash flow?
7. What is the approximate budget for plan contributions?
⩥ Vesting schedules add to a. Answer: plan's administrative complexity
for record keepers and TPAs, and can add to the plan's cost. However,
employers often consider forfeitures advantageous for cost savings and
therefore may prefer vesting schedules that do not vest participants
100% immediately.
⩥ It is important to remind employers that not all their contributions are
subject to. Answer: vesting, especially safe harbor contributions that are
always 100% vested.
⩥ Advisors should discuss loan and hardship withdrawal provisions
with. Answer: plan sponsors and plan fiduciaries.
Because these provisions are optional, plans whose goal is for
participants to save for retirement do not have to offer them. However,
many participants will not defer if they believe they cannot get their
money out until they retire or leave the company.
⩥ Loans and hardships have a track record of. Answer: encouraging
participation
