NAPA CPFA (Certified Plan Fiduciary Advisor) Certification Exam |
Complete Exam Guide with Questions, Verified Correct Answers and
Explanations –Latest Update (2026/2027) with 100% Guaranteed
Pass /Graded A+.
Question 1
Under the Employee Retirement Income Security Act (ERISA), what is the
primary duty of a retirement plan fiduciary?
A. Maximize employer profits
B. Act solely in the interest of plan participants and beneficiaries
C. Recommend only proprietary investment products
D. Guarantee investment returns
Correct Answer: B. Act Solely in the Interest of Plan Participants and
Beneficiaries
Explanation: ERISA requires fiduciaries to act exclusively in the interests of
plan participants and beneficiaries, exercising loyalty and prudence in every
decision.
Question 2
Which ERISA standard requires fiduciaries to act with the care, skill,
prudence, and diligence that a knowledgeable professional would exercise?
A. Diversification Rule
B. Exclusive Benefit Rule
C. Prudent Expert Rule
D. Suitability Standard
1|Page
,Correct Answer: C. Prudent Expert Rule
Explanation: The Prudent Expert Rule requires fiduciaries to make decisions
with the care and expertise expected of someone familiar with retirement
plan management.
Question 3
Who is generally considered a fiduciary under ERISA?
A. Anyone who provides office supplies
B. Anyone exercising discretionary authority over plan management or assets
C. Every employee participating in the plan
D. Payroll clerks automatically
Correct Answer: B. Anyone Exercising Discretionary Authority Over Plan
Management or Assets
Explanation: A fiduciary is determined by function rather than title. Anyone
exercising discretionary authority over plan administration or assets may be a
fiduciary.
Question 4
Which retirement plan feature encourages employees to save by automatically
enrolling eligible workers unless they opt out?
A. Safe Harbor Match
B. Automatic Enrollment
C. Roth Conversion
D. Vesting Schedule
2|Page
,Correct Answer: B. Automatic Enrollment
Explanation: Automatic enrollment has been shown to increase participation
rates by making enrollment the default option.
Question 5
What is the primary purpose of an Investment Policy Statement (IPS)?
A. Guarantee investment performance
B. Document investment objectives, selection criteria, monitoring procedures,
and fiduciary responsibilities
C. Eliminate fiduciary liability
D. Replace ERISA regulations
Correct Answer: B. Document Investment Objectives, Selection Criteria,
Monitoring Procedures, and Fiduciary Responsibilities
Explanation: An IPS provides a structured framework for selecting and
monitoring investment options and demonstrates a prudent fiduciary process.
Question 6
Which ERISA requirement helps reduce participant risk by encouraging
investment diversification?
A. Concentrating investments in one fund
B. Diversification of plan investments
C. Eliminating target-date funds
D. Investing only in employer stock
Correct Answer: B. Diversification of Plan Investments
3|Page
, Explanation: Diversification helps minimize the impact of poor performance
from any single investment.
Question 7
Which document describes the rules governing a retirement plan?
A. Summary Annual Report
B. Plan Document
C. Investment Prospectus
D. Trust Agreement Only
Correct Answer: B. Plan Document
Explanation: The plan document establishes eligibility, contributions,
distributions, fiduciary responsibilities, and other operational rules.
Question 8
What is the purpose of the Summary Plan Description (SPD)?
A. Explain plan provisions and participant rights in understandable language
B. Replace the plan document
C. Provide investment guarantees
D. Eliminate fiduciary duties
Correct Answer: A. Explain Plan Provisions and Participant Rights in
Understandable Language
Explanation: The SPD communicates key plan information in a format
participants can easily understand.
4|Page
Complete Exam Guide with Questions, Verified Correct Answers and
Explanations –Latest Update (2026/2027) with 100% Guaranteed
Pass /Graded A+.
Question 1
Under the Employee Retirement Income Security Act (ERISA), what is the
primary duty of a retirement plan fiduciary?
A. Maximize employer profits
B. Act solely in the interest of plan participants and beneficiaries
C. Recommend only proprietary investment products
D. Guarantee investment returns
Correct Answer: B. Act Solely in the Interest of Plan Participants and
Beneficiaries
Explanation: ERISA requires fiduciaries to act exclusively in the interests of
plan participants and beneficiaries, exercising loyalty and prudence in every
decision.
Question 2
Which ERISA standard requires fiduciaries to act with the care, skill,
prudence, and diligence that a knowledgeable professional would exercise?
A. Diversification Rule
B. Exclusive Benefit Rule
C. Prudent Expert Rule
D. Suitability Standard
1|Page
,Correct Answer: C. Prudent Expert Rule
Explanation: The Prudent Expert Rule requires fiduciaries to make decisions
with the care and expertise expected of someone familiar with retirement
plan management.
Question 3
Who is generally considered a fiduciary under ERISA?
A. Anyone who provides office supplies
B. Anyone exercising discretionary authority over plan management or assets
C. Every employee participating in the plan
D. Payroll clerks automatically
Correct Answer: B. Anyone Exercising Discretionary Authority Over Plan
Management or Assets
Explanation: A fiduciary is determined by function rather than title. Anyone
exercising discretionary authority over plan administration or assets may be a
fiduciary.
Question 4
Which retirement plan feature encourages employees to save by automatically
enrolling eligible workers unless they opt out?
A. Safe Harbor Match
B. Automatic Enrollment
C. Roth Conversion
D. Vesting Schedule
2|Page
,Correct Answer: B. Automatic Enrollment
Explanation: Automatic enrollment has been shown to increase participation
rates by making enrollment the default option.
Question 5
What is the primary purpose of an Investment Policy Statement (IPS)?
A. Guarantee investment performance
B. Document investment objectives, selection criteria, monitoring procedures,
and fiduciary responsibilities
C. Eliminate fiduciary liability
D. Replace ERISA regulations
Correct Answer: B. Document Investment Objectives, Selection Criteria,
Monitoring Procedures, and Fiduciary Responsibilities
Explanation: An IPS provides a structured framework for selecting and
monitoring investment options and demonstrates a prudent fiduciary process.
Question 6
Which ERISA requirement helps reduce participant risk by encouraging
investment diversification?
A. Concentrating investments in one fund
B. Diversification of plan investments
C. Eliminating target-date funds
D. Investing only in employer stock
Correct Answer: B. Diversification of Plan Investments
3|Page
, Explanation: Diversification helps minimize the impact of poor performance
from any single investment.
Question 7
Which document describes the rules governing a retirement plan?
A. Summary Annual Report
B. Plan Document
C. Investment Prospectus
D. Trust Agreement Only
Correct Answer: B. Plan Document
Explanation: The plan document establishes eligibility, contributions,
distributions, fiduciary responsibilities, and other operational rules.
Question 8
What is the purpose of the Summary Plan Description (SPD)?
A. Explain plan provisions and participant rights in understandable language
B. Replace the plan document
C. Provide investment guarantees
D. Eliminate fiduciary duties
Correct Answer: A. Explain Plan Provisions and Participant Rights in
Understandable Language
Explanation: The SPD communicates key plan information in a format
participants can easily understand.
4|Page
