CPFA PRACTICE EXAM (NAPA QUESTIONS)
PRACTICE EXAM QUESTIONS AND
CORRECT ANSWERS (VERIFIED ANSWERS)
PLUS RATIONALES 2026 Q&A | INSTANT
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Core Domains
• ERISA Fiduciary Roles & Responsibilities
• ERISA Fiduciary Oversight & Plan Governance
• ERISA Plan Investment Management
• ERISA Plan Management & Administration
• Plan Fees, Service Provider Evaluation & Participant Outcomes
• Regulatory Compliance, Risk Management & Ethics
• Prohibited Transactions & Fiduciary Breach
• Behavioral Finance & Retirement Readiness
• Plan Corrections & Remediation (EPCRS)
• SECURE 2.0 & Emerging Regulatory Trends
Introduction
This comprehensive examination assesses the Certified Plan
Fiduciary Advisor's mastery of ERISA fiduciary governance,
,retirement plan design, investment stewardship, and regulatory
compliance. It evaluates knowledge across fiduciary roles and
responsibilities, plan oversight, investment management, plan
administration, service provider evaluation, prohibited transactions,
and participant outcomes. The multiple-choice and scenario-based
format emphasizes real-world application, critical thinking, and
ethical decision-making. Candidates are tested on their ability to
apply ERISA standards, DOL guidance, SECURE 2.0 provisions, and
behavioral finance principles to optimize retirement plan outcomes
while managing fiduciary risk.
SECTION ONE: QUESTIONS 1–200
Question 1
Under ERISA Section 3(21), which of the following best describes
when a person is considered a fiduciary of an employee benefit
plan?
A. When they are named as a fiduciary in the plan document
B. When they exercise any discretionary authority or control over
plan management or disposition of plan assets
C. When they provide investment advice to the plan sponsor for a
fee
D. When they are employed by the plan sponsor
B. When they exercise any discretionary authority or control
over plan management or disposition of plan assets
, RATIONALE: Under ERISA Section 3(21)(A), a person is a
fiduciary to the extent they exercise any discretionary authority or
discretionary control respecting management of the plan or exercise
any authority or control respecting management or disposition of
its assets. This is known as the "functional fiduciary" test—fiduciary
status is determined by the functions performed, not just by the
title. Being named in the plan document (A) creates named
fiduciary status but is not the sole defining criterion. Providing
investment advice for a fee (C) is one way to become a fiduciary but
is not comprehensive. Employment by the plan sponsor (D) alone
does not create fiduciary status.
Question 2
A retirement plan advisor is hired to provide recommendations on
the plan's investment menu but does not have discretionary
authority over plan assets. Under ERISA, this advisor is most likely
classified as a:
A. 3(16) Administrator
B. 3(21) Investment Advisor Fiduciary
C. 3(38) Investment Manager
D. Named Fiduciary
B. 3(21) Investment Advisor Fiduciary
RATIONALE: A 3(21) fiduciary provides investment advice and
recommendations but does not have discretionary authority over
plan assets. The plan sponsor or another fiduciary retains the
discretion to accept or reject the recommendations. In contrast, a
, 3(38) investment manager has full discretionary authority over plan
assets. A 3(16) administrator handles plan administration functions.
A named fiduciary is identified in the plan document.
Question 3
The Exclusive Purpose Rule under ERISA requires that a fiduciary:
A. Act solely in the interest of the plan sponsor
B. Act solely in the interest of plan participants and beneficiaries
and for the exclusive purpose of providing benefits and defraying
reasonable expenses
C. Maximize investment returns regardless of risk
D. Minimize plan expenses at all costs
B. Act solely in the interest of plan participants and beneficiaries
and for the exclusive purpose of providing benefits and defraying
reasonable expenses
RATIONALE: The Exclusive Purpose Rule (ERISA Section
404(a)(1)(A)) requires that a fiduciary discharge their duties solely
in the interest of the participants and beneficiaries and for the
exclusive purpose of providing benefits to participants and their
beneficiaries and defraying reasonable expenses of administering
the plan. This is the foundation of fiduciary loyalty.
Question 4
The four exclusive fiduciary duties under ERISA Section 404(a) are
loyalty, prudence, diversification, and:
PRACTICE EXAM QUESTIONS AND
CORRECT ANSWERS (VERIFIED ANSWERS)
PLUS RATIONALES 2026 Q&A | INSTANT
DOWNLOAD PDF
Core Domains
• ERISA Fiduciary Roles & Responsibilities
• ERISA Fiduciary Oversight & Plan Governance
• ERISA Plan Investment Management
• ERISA Plan Management & Administration
• Plan Fees, Service Provider Evaluation & Participant Outcomes
• Regulatory Compliance, Risk Management & Ethics
• Prohibited Transactions & Fiduciary Breach
• Behavioral Finance & Retirement Readiness
• Plan Corrections & Remediation (EPCRS)
• SECURE 2.0 & Emerging Regulatory Trends
Introduction
This comprehensive examination assesses the Certified Plan
Fiduciary Advisor's mastery of ERISA fiduciary governance,
,retirement plan design, investment stewardship, and regulatory
compliance. It evaluates knowledge across fiduciary roles and
responsibilities, plan oversight, investment management, plan
administration, service provider evaluation, prohibited transactions,
and participant outcomes. The multiple-choice and scenario-based
format emphasizes real-world application, critical thinking, and
ethical decision-making. Candidates are tested on their ability to
apply ERISA standards, DOL guidance, SECURE 2.0 provisions, and
behavioral finance principles to optimize retirement plan outcomes
while managing fiduciary risk.
SECTION ONE: QUESTIONS 1–200
Question 1
Under ERISA Section 3(21), which of the following best describes
when a person is considered a fiduciary of an employee benefit
plan?
A. When they are named as a fiduciary in the plan document
B. When they exercise any discretionary authority or control over
plan management or disposition of plan assets
C. When they provide investment advice to the plan sponsor for a
fee
D. When they are employed by the plan sponsor
B. When they exercise any discretionary authority or control
over plan management or disposition of plan assets
, RATIONALE: Under ERISA Section 3(21)(A), a person is a
fiduciary to the extent they exercise any discretionary authority or
discretionary control respecting management of the plan or exercise
any authority or control respecting management or disposition of
its assets. This is known as the "functional fiduciary" test—fiduciary
status is determined by the functions performed, not just by the
title. Being named in the plan document (A) creates named
fiduciary status but is not the sole defining criterion. Providing
investment advice for a fee (C) is one way to become a fiduciary but
is not comprehensive. Employment by the plan sponsor (D) alone
does not create fiduciary status.
Question 2
A retirement plan advisor is hired to provide recommendations on
the plan's investment menu but does not have discretionary
authority over plan assets. Under ERISA, this advisor is most likely
classified as a:
A. 3(16) Administrator
B. 3(21) Investment Advisor Fiduciary
C. 3(38) Investment Manager
D. Named Fiduciary
B. 3(21) Investment Advisor Fiduciary
RATIONALE: A 3(21) fiduciary provides investment advice and
recommendations but does not have discretionary authority over
plan assets. The plan sponsor or another fiduciary retains the
discretion to accept or reject the recommendations. In contrast, a
, 3(38) investment manager has full discretionary authority over plan
assets. A 3(16) administrator handles plan administration functions.
A named fiduciary is identified in the plan document.
Question 3
The Exclusive Purpose Rule under ERISA requires that a fiduciary:
A. Act solely in the interest of the plan sponsor
B. Act solely in the interest of plan participants and beneficiaries
and for the exclusive purpose of providing benefits and defraying
reasonable expenses
C. Maximize investment returns regardless of risk
D. Minimize plan expenses at all costs
B. Act solely in the interest of plan participants and beneficiaries
and for the exclusive purpose of providing benefits and defraying
reasonable expenses
RATIONALE: The Exclusive Purpose Rule (ERISA Section
404(a)(1)(A)) requires that a fiduciary discharge their duties solely
in the interest of the participants and beneficiaries and for the
exclusive purpose of providing benefits to participants and their
beneficiaries and defraying reasonable expenses of administering
the plan. This is the foundation of fiduciary loyalty.
Question 4
The four exclusive fiduciary duties under ERISA Section 404(a) are
loyalty, prudence, diversification, and:
