NAPA CPFA Certification Exam - National Association of
Plan Advisors Certified Plan Fiduciary Advisor - 2026/2027
Edition - 250 Verified Questions
NAPA CPFA Certification Exam 2026-2027 QUESTIONS AND ANSWERS ALREADY GRADED A+. 100%
Verified Solutions | Updated Per Latest Guidelines | Graded A+
This comprehensive study guide provides 250 verified questions and answers for the NAPA CPFA
Certification Exam, covering all key domains of fiduciary responsibility, retirement plan management,
and regulatory compliance. Designed for 2026/2027 candidates, it reflects the latest ERISA and DOL
guidelines. Each question includes detailed rationales to reinforce understanding and ensure exam
readiness.
Key Features:
Fiduciary Standards and ERISA Compliance
Plan Design and Investment Fiduciary Duties
Participant Communication and Education
Regulatory Updates and Best Practices
Risk Management and Plan Governance
Ethical and Legal Responsibilities
Updates for 2026:
- Incorporates 2026 DOL fiduciary rule updates
- Expanded coverage of ESG and proxy voting considerations
- Updated QDIA and automatic enrollment features
- New questions on cybersecurity and data privacy for plan sponsors
- Revised rationales reflecting latest regulatory guidance
Abstract:
The NAPA CPFA Certification Exam is the leading credential for retirement plan advisors seeking to demonstrate
expertise in fiduciary best practices. This 2026/2027 edition contains 250 meticulously verified questions that
mirror the exam's content and difficulty. The material is organized into core areas: fiduciary standards, plan
design, investment management, participant education, and regulatory compliance. Each question is accompanied
by a detailed rationale explaining the correct answer and common misconceptions. The guide emphasizes practical
application of ERISA requirements, including prohibited transactions, fee disclosure, and fiduciary monitoring.
Updated to reflect recent DOL rulings and SECURE Act provisions, this resource ensures candidates are prepared
for the evolving regulatory landscape. Special attention is given to emerging topics such as lifetime income
options, managed accounts, and fiduciary liability mitigation strategies. By mastering these questions, candidates
will build the confidence needed to pass the CPFA exam and advance their careers as trusted retirement plan
advisors.
Keywords:
NAPA CPFA, Certified Plan Fiduciary Advisor, ERISA compliance, fiduciary duty, retirement plan advisor, plan
governance, investment fiduciary, participant education
Answer Format:
Each question is followed by the correct answer and a comprehensive rationale explaining why it is correct, along
with analysis of incorrect options. Rationales cite relevant ERISA sections, DOL guidance, and industry best
practices to deepen understanding.
Page 1
,Compliance Checklist:
All questions verified against 2026 NAPA CPFA exam blueprint
Rationales cite current ERISA and DOL regulations
Content reviewed by certified plan fiduciaries
Includes updates from SECURE 2.0 and recent fiduciary rulings
Covers all tested domains with appropriate weight distribution
Designed to simulate actual exam difficulty and format
Content Area Overview:
Content Area Questions Key Topics Weight
Fiduciary Standards and ERISA 1-50 Fiduciary definition, prohibited transactions, 20%
Compliance duty of loyalty, duty of prudence, ERISA
Section 404(c)
Plan Design and Investment 51-100 Plan types (401(k), 403(b), etc.), investment 20%
Fiduciary Duties policy statements, QDIA, fee benchmarking,
fund selection and monitoring
Participant Communication and 101-150 Participant disclosures, investment 20%
Education education vs. advice, enrollment strategies,
financial wellness programs
Regulatory Updates and Best 151-200 DOL fiduciary rule, SECURE Act 20%
Practices provisions, ESG considerations,
cybersecurity guidance, lifetime income
illustrations
Risk Management and Plan 201-250 Fiduciary liability insurance, plan audits, 20%
Governance fiduciary file documentation, service
provider selection and monitoring,
corrective actions
Page 2
,Q1. A plan sponsor of a 401(k) plan with $50 million in assets is considering replacing the current
recordkeeper due to service issues. The advisor recommends issuing a request for proposal (RFP) to
three providers. Which of the following actions would most likely violate the fiduciary duty of
prudence under ERISA Section 404(a)(1)(B)?
A. Including only providers that use a bundled fee structure to simplify comparison
B. Requiring all responding providers to disclose both explicit and implicit fees in a standardized
format
C. Engaging an independent third-party consultant to evaluate the proposals
D. Documenting the rationale for the final selection in plan committee minutes
Correct Answer: A. Including only providers that use a bundled fee structure to simplify
comparison
Rationale: Limiting the RFP to only bundled fee providers arbitrarily restricts the pool without a
documented reason, potentially failing the prudent process. ERISA requires a thorough, objective search;
excluding unbundled providers without justification could be imprudent. Options B, C, and D all reflect
prudent practices.
Why Wrong:
B - Requiring standardized fee disclosure is a prudent step to ensure comparability.
C - Engaging an independent consultant is a prudent delegation of expertise.
D - Documenting rationale supports a fiduciary process and demonstrates prudence.
Reference: ERISA Section 404(a)(1)(B); DOL Interpretive Bulletin 96-1
Q2. A plan fiduciary is evaluating a target-date fund (TDF) series for a 401(k) plan. The TDF uses a
to-retirement glide path that reaches its most conservative allocation five years after the target date.
Which of the following is a key consideration under the DOL's 2013 TDF guidance?
A. The glide path design must be identical for all participants regardless of account balance.
B. The fiduciary must compare the TDF's fees to a peer group of similar TDFs.
C. The fiduciary must ensure the TDF's asset allocation at the target date matches a static 60/40
equity/fixed income ratio.
D. The TDF must offer a guaranteed minimum return at retirement.
Correct Answer: B. The fiduciary must compare the TDF's fees to a peer group of similar TDFs.
Rationale: DOL guidance emphasizes that fiduciaries should evaluate TDF fees relative to comparable
funds, as fees directly impact retirement savings. Option A is false because TDFs are typically the same
for all participants, but that is not a requirement of the guidance; the key is prudent selection. Options C
and D are incorrect: there is no mandated static allocation or guaranteed return.
Why Wrong:
A - TDFs are generally uniform, but the guidance does not mandate identical allocation for all
participants; it focuses on prudent selection.
C - No specific allocation ratio is required; the glide path is a fund design choice.
D - TDFs do not guarantee returns; they are investment vehicles subject to market risk.
Reference: DOL Target Date Retirement Fund Guidance (2013); Field Assistance Bulletin 2013-03
Page 3
, Q3. An advisor is reviewing the investment policy statement (IPS) for a defined contribution plan.
The IPS currently states that the plan will offer 15 investment options, including a company stock
fund. Under ERISA, which of the following is a permissible restriction on participant-directed
investments?
A. Prohibiting participants from transferring out of the company stock fund until age 55
B. Limiting participants to one exchange per month between funds
C. Requiring participants to obtain spousal consent before changing their investment elections
D. Excluding participants with balances below $1,000 from selecting certain funds
Correct Answer: B. Limiting participants to one exchange per month between funds
Rationale: ERISA Section 404(c) permits reasonable restrictions on trading frequency to protect
participants from excessive trading and associated costs, as long as they are disclosed. Option A would
violate ERISA by imposing an age-based restriction on diversification out of employer stock. Option C is
not required for participant-directed investments (spousal consent applies to benefit distributions, not
investment changes). Option D is discriminatory and could violate Section 404(c) safe harbor
requirements.
Why Wrong:
A - Restricting transfers out of company stock based on age violates ERISA's diversification rights.
C - Spousal consent is not required for investment changes; it is for certain distribution forms.
D - Excluding low-balance participants from certain funds may be discriminatory and not within
404(c) safe harbor.
Reference: ERISA Section 404(c); 29 CFR § 2550.404c-1
Q4. A plan sponsor receives a proposal from a service provider that includes revenue sharing from
mutual funds to offset recordkeeping fees. The provider offers to credit the revenue sharing to the
plan's forfeiture account rather than to participant accounts. Under ERISA, which of the following
is the most appropriate fiduciary action?
A. Accept the proposal because revenue sharing can be used to pay plan expenses as long as it is
reasonable.
B. Reject the proposal because revenue sharing must always be allocated to participant accounts
proportionally.
C. Require that the revenue sharing be used exclusively to reduce future employer contributions.
D. Request a written opinion from the provider that the arrangement does not constitute a prohibited
transaction.
Correct Answer: A. Accept the proposal because revenue sharing can be used to pay plan expenses
as long as it is reasonable.
Rationale: Revenue sharing can be used to pay reasonable plan expenses, including recordkeeping, as
long as the total fees are reasonable. Crediting to the forfeiture account is permissible if forfeitures are
used for plan expenses or to reduce employer contributions. Option B is incorrect because revenue
sharing does not have to be allocated to participants; it can be used for plan expenses. Option C is too
restrictive; forfeitures have multiple permissible uses. Option D is unnecessary; the arrangement is not
inherently a prohibited transaction if properly structured.
Why Wrong:
B - Revenue sharing can be used for plan expenses; it does not have to be allocated to participants.
C - Forfeitures can also be used to pay plan expenses, not only to reduce contributions.
D - The arrangement is not automatically a prohibited transaction; no opinion is required.
Reference: ERISA Section 404(a); DOL Advisory Opinion 97-16A; 29 CFR § 2550.408b-2
Page 4
Plan Advisors Certified Plan Fiduciary Advisor - 2026/2027
Edition - 250 Verified Questions
NAPA CPFA Certification Exam 2026-2027 QUESTIONS AND ANSWERS ALREADY GRADED A+. 100%
Verified Solutions | Updated Per Latest Guidelines | Graded A+
This comprehensive study guide provides 250 verified questions and answers for the NAPA CPFA
Certification Exam, covering all key domains of fiduciary responsibility, retirement plan management,
and regulatory compliance. Designed for 2026/2027 candidates, it reflects the latest ERISA and DOL
guidelines. Each question includes detailed rationales to reinforce understanding and ensure exam
readiness.
Key Features:
Fiduciary Standards and ERISA Compliance
Plan Design and Investment Fiduciary Duties
Participant Communication and Education
Regulatory Updates and Best Practices
Risk Management and Plan Governance
Ethical and Legal Responsibilities
Updates for 2026:
- Incorporates 2026 DOL fiduciary rule updates
- Expanded coverage of ESG and proxy voting considerations
- Updated QDIA and automatic enrollment features
- New questions on cybersecurity and data privacy for plan sponsors
- Revised rationales reflecting latest regulatory guidance
Abstract:
The NAPA CPFA Certification Exam is the leading credential for retirement plan advisors seeking to demonstrate
expertise in fiduciary best practices. This 2026/2027 edition contains 250 meticulously verified questions that
mirror the exam's content and difficulty. The material is organized into core areas: fiduciary standards, plan
design, investment management, participant education, and regulatory compliance. Each question is accompanied
by a detailed rationale explaining the correct answer and common misconceptions. The guide emphasizes practical
application of ERISA requirements, including prohibited transactions, fee disclosure, and fiduciary monitoring.
Updated to reflect recent DOL rulings and SECURE Act provisions, this resource ensures candidates are prepared
for the evolving regulatory landscape. Special attention is given to emerging topics such as lifetime income
options, managed accounts, and fiduciary liability mitigation strategies. By mastering these questions, candidates
will build the confidence needed to pass the CPFA exam and advance their careers as trusted retirement plan
advisors.
Keywords:
NAPA CPFA, Certified Plan Fiduciary Advisor, ERISA compliance, fiduciary duty, retirement plan advisor, plan
governance, investment fiduciary, participant education
Answer Format:
Each question is followed by the correct answer and a comprehensive rationale explaining why it is correct, along
with analysis of incorrect options. Rationales cite relevant ERISA sections, DOL guidance, and industry best
practices to deepen understanding.
Page 1
,Compliance Checklist:
All questions verified against 2026 NAPA CPFA exam blueprint
Rationales cite current ERISA and DOL regulations
Content reviewed by certified plan fiduciaries
Includes updates from SECURE 2.0 and recent fiduciary rulings
Covers all tested domains with appropriate weight distribution
Designed to simulate actual exam difficulty and format
Content Area Overview:
Content Area Questions Key Topics Weight
Fiduciary Standards and ERISA 1-50 Fiduciary definition, prohibited transactions, 20%
Compliance duty of loyalty, duty of prudence, ERISA
Section 404(c)
Plan Design and Investment 51-100 Plan types (401(k), 403(b), etc.), investment 20%
Fiduciary Duties policy statements, QDIA, fee benchmarking,
fund selection and monitoring
Participant Communication and 101-150 Participant disclosures, investment 20%
Education education vs. advice, enrollment strategies,
financial wellness programs
Regulatory Updates and Best 151-200 DOL fiduciary rule, SECURE Act 20%
Practices provisions, ESG considerations,
cybersecurity guidance, lifetime income
illustrations
Risk Management and Plan 201-250 Fiduciary liability insurance, plan audits, 20%
Governance fiduciary file documentation, service
provider selection and monitoring,
corrective actions
Page 2
,Q1. A plan sponsor of a 401(k) plan with $50 million in assets is considering replacing the current
recordkeeper due to service issues. The advisor recommends issuing a request for proposal (RFP) to
three providers. Which of the following actions would most likely violate the fiduciary duty of
prudence under ERISA Section 404(a)(1)(B)?
A. Including only providers that use a bundled fee structure to simplify comparison
B. Requiring all responding providers to disclose both explicit and implicit fees in a standardized
format
C. Engaging an independent third-party consultant to evaluate the proposals
D. Documenting the rationale for the final selection in plan committee minutes
Correct Answer: A. Including only providers that use a bundled fee structure to simplify
comparison
Rationale: Limiting the RFP to only bundled fee providers arbitrarily restricts the pool without a
documented reason, potentially failing the prudent process. ERISA requires a thorough, objective search;
excluding unbundled providers without justification could be imprudent. Options B, C, and D all reflect
prudent practices.
Why Wrong:
B - Requiring standardized fee disclosure is a prudent step to ensure comparability.
C - Engaging an independent consultant is a prudent delegation of expertise.
D - Documenting rationale supports a fiduciary process and demonstrates prudence.
Reference: ERISA Section 404(a)(1)(B); DOL Interpretive Bulletin 96-1
Q2. A plan fiduciary is evaluating a target-date fund (TDF) series for a 401(k) plan. The TDF uses a
to-retirement glide path that reaches its most conservative allocation five years after the target date.
Which of the following is a key consideration under the DOL's 2013 TDF guidance?
A. The glide path design must be identical for all participants regardless of account balance.
B. The fiduciary must compare the TDF's fees to a peer group of similar TDFs.
C. The fiduciary must ensure the TDF's asset allocation at the target date matches a static 60/40
equity/fixed income ratio.
D. The TDF must offer a guaranteed minimum return at retirement.
Correct Answer: B. The fiduciary must compare the TDF's fees to a peer group of similar TDFs.
Rationale: DOL guidance emphasizes that fiduciaries should evaluate TDF fees relative to comparable
funds, as fees directly impact retirement savings. Option A is false because TDFs are typically the same
for all participants, but that is not a requirement of the guidance; the key is prudent selection. Options C
and D are incorrect: there is no mandated static allocation or guaranteed return.
Why Wrong:
A - TDFs are generally uniform, but the guidance does not mandate identical allocation for all
participants; it focuses on prudent selection.
C - No specific allocation ratio is required; the glide path is a fund design choice.
D - TDFs do not guarantee returns; they are investment vehicles subject to market risk.
Reference: DOL Target Date Retirement Fund Guidance (2013); Field Assistance Bulletin 2013-03
Page 3
, Q3. An advisor is reviewing the investment policy statement (IPS) for a defined contribution plan.
The IPS currently states that the plan will offer 15 investment options, including a company stock
fund. Under ERISA, which of the following is a permissible restriction on participant-directed
investments?
A. Prohibiting participants from transferring out of the company stock fund until age 55
B. Limiting participants to one exchange per month between funds
C. Requiring participants to obtain spousal consent before changing their investment elections
D. Excluding participants with balances below $1,000 from selecting certain funds
Correct Answer: B. Limiting participants to one exchange per month between funds
Rationale: ERISA Section 404(c) permits reasonable restrictions on trading frequency to protect
participants from excessive trading and associated costs, as long as they are disclosed. Option A would
violate ERISA by imposing an age-based restriction on diversification out of employer stock. Option C is
not required for participant-directed investments (spousal consent applies to benefit distributions, not
investment changes). Option D is discriminatory and could violate Section 404(c) safe harbor
requirements.
Why Wrong:
A - Restricting transfers out of company stock based on age violates ERISA's diversification rights.
C - Spousal consent is not required for investment changes; it is for certain distribution forms.
D - Excluding low-balance participants from certain funds may be discriminatory and not within
404(c) safe harbor.
Reference: ERISA Section 404(c); 29 CFR § 2550.404c-1
Q4. A plan sponsor receives a proposal from a service provider that includes revenue sharing from
mutual funds to offset recordkeeping fees. The provider offers to credit the revenue sharing to the
plan's forfeiture account rather than to participant accounts. Under ERISA, which of the following
is the most appropriate fiduciary action?
A. Accept the proposal because revenue sharing can be used to pay plan expenses as long as it is
reasonable.
B. Reject the proposal because revenue sharing must always be allocated to participant accounts
proportionally.
C. Require that the revenue sharing be used exclusively to reduce future employer contributions.
D. Request a written opinion from the provider that the arrangement does not constitute a prohibited
transaction.
Correct Answer: A. Accept the proposal because revenue sharing can be used to pay plan expenses
as long as it is reasonable.
Rationale: Revenue sharing can be used to pay reasonable plan expenses, including recordkeeping, as
long as the total fees are reasonable. Crediting to the forfeiture account is permissible if forfeitures are
used for plan expenses or to reduce employer contributions. Option B is incorrect because revenue
sharing does not have to be allocated to participants; it can be used for plan expenses. Option C is too
restrictive; forfeitures have multiple permissible uses. Option D is unnecessary; the arrangement is not
inherently a prohibited transaction if properly structured.
Why Wrong:
B - Revenue sharing can be used for plan expenses; it does not have to be allocated to participants.
C - Forfeitures can also be used to pay plan expenses, not only to reduce contributions.
D - The arrangement is not automatically a prohibited transaction; no opinion is required.
Reference: ERISA Section 404(a); DOL Advisory Opinion 97-16A; 29 CFR § 2550.408b-2
Page 4
