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[CRA] Certified Retirement Administrator
Practice Exam Questions & Answers VERIFIED
SOLUTIONS LATEST UPDATE THIS YEAR
[CRA] Certified Retirement Administrator Practice Exam
The CRA exam validates expertise in the administration and compliance of qualified retirement
plans . The curriculum is divided into two core parts: Plan Management (QKA-1) , covering
foundational knowledge including characteristics of defined contribution plans, ERISA
qualification requirements, contribution limits, distribution rules, and vesting schedules ;
and Testing & Compliance (QKA-2) , focusing on nondiscrimination testing (ADP/ACP), top-
heavy plan requirements, and correction procedures .
Domain 1: Plan Types & Characteristics
Question 1
Which of the following best characterizes a Defined Contribution Plan?
A) Provides a guaranteed retirement benefit based on salary and years of service
B) Employer contributions are defined, but the retirement benefit varies based on investment
performance
C) Requires the employer to make contributions based on a percentage of employee earnings
D) Guarantees a fixed monthly payment upon retirement
Answer: B
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Defined Contribution plans specify the contribution amount, but the ultimate benefit is not
guaranteed and fluctuates with investment returns .
Question 2
What is a primary distinction between Defined Contribution Plans and Defined Benefit Plans?
A) Defined Contribution Plans guarantee a specific benefit at retirement
B) Defined Benefit Plans have variable contributions based on investment performance
C) Defined Contribution Plans do not promise a specific payout at retirement
D) Defined Benefit Plans do not involve employer contributions
Answer: C
The key distinction is that Defined Benefit plans promise a specific benefit, whereas Defined
Contribution plans only promise a contribution level, with no guarantee on the final payout .
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Question 3
Which of the following is an example of a Defined Contribution Plan?
A) Traditional Pension Plan
B) 401(k) Plan
C) Cash Balance Plan
D) Guaranteed Income Plan
Answer: B
A 401(k) plan is a type of defined contribution plan where employees defer a portion of their
salary into an individual account .
Question 4
Which of the following best describes a Defined Benefit (DB) plan?
A) Participants receive a fixed contribution amount each year
B) Benefits are based on a formula that considers salary and years of service
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C) Contributions are made only by the employee
D) The plan invests only in government securities
Answer: B
A DB plan promises a retirement benefit calculated using a predetermined formula, typically
factoring in the employee's final compensation and years of service .
Question 5
A cash balance plan is considered a hybrid because it:
A) Provides a lump-sum death benefit only
B) Combines a DB formula with DC-style individual account statements
C) Allows participants to choose between pre-tax and Roth contributions
D) Requires mandatory employer profit sharing each year
Answer: B
[CRA] Certified Retirement Administrator
Practice Exam Questions & Answers VERIFIED
SOLUTIONS LATEST UPDATE THIS YEAR
[CRA] Certified Retirement Administrator Practice Exam
The CRA exam validates expertise in the administration and compliance of qualified retirement
plans . The curriculum is divided into two core parts: Plan Management (QKA-1) , covering
foundational knowledge including characteristics of defined contribution plans, ERISA
qualification requirements, contribution limits, distribution rules, and vesting schedules ;
and Testing & Compliance (QKA-2) , focusing on nondiscrimination testing (ADP/ACP), top-
heavy plan requirements, and correction procedures .
Domain 1: Plan Types & Characteristics
Question 1
Which of the following best characterizes a Defined Contribution Plan?
A) Provides a guaranteed retirement benefit based on salary and years of service
B) Employer contributions are defined, but the retirement benefit varies based on investment
performance
C) Requires the employer to make contributions based on a percentage of employee earnings
D) Guarantees a fixed monthly payment upon retirement
Answer: B
,Page 2 of 189
Defined Contribution plans specify the contribution amount, but the ultimate benefit is not
guaranteed and fluctuates with investment returns .
Question 2
What is a primary distinction between Defined Contribution Plans and Defined Benefit Plans?
A) Defined Contribution Plans guarantee a specific benefit at retirement
B) Defined Benefit Plans have variable contributions based on investment performance
C) Defined Contribution Plans do not promise a specific payout at retirement
D) Defined Benefit Plans do not involve employer contributions
Answer: C
The key distinction is that Defined Benefit plans promise a specific benefit, whereas Defined
Contribution plans only promise a contribution level, with no guarantee on the final payout .
,Page 3 of 189
Question 3
Which of the following is an example of a Defined Contribution Plan?
A) Traditional Pension Plan
B) 401(k) Plan
C) Cash Balance Plan
D) Guaranteed Income Plan
Answer: B
A 401(k) plan is a type of defined contribution plan where employees defer a portion of their
salary into an individual account .
Question 4
Which of the following best describes a Defined Benefit (DB) plan?
A) Participants receive a fixed contribution amount each year
B) Benefits are based on a formula that considers salary and years of service
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C) Contributions are made only by the employee
D) The plan invests only in government securities
Answer: B
A DB plan promises a retirement benefit calculated using a predetermined formula, typically
factoring in the employee's final compensation and years of service .
Question 5
A cash balance plan is considered a hybrid because it:
A) Provides a lump-sum death benefit only
B) Combines a DB formula with DC-style individual account statements
C) Allows participants to choose between pre-tax and Roth contributions
D) Requires mandatory employer profit sharing each year
Answer: B
