CPFA Designation Exam Questions
and Answers
Fiduciary functions are those that involve what two things? - -1- Control (or
management of plan assets)
2- Administration (discretionary authority over plan operations)
-What are the 3 primary sets of rules that serve as foundation to fiduciary
responsibility? - -1- Exclusive Purpose Rule
2- Fiduciary standard of care
3- Prohibited Transactions Rule
-What established ERISA fiduciary standard of care? - -Section 404
-What are the 4 basic fiduciary standards? - -1- Loyalty
2- Prudence
3- Diversification
4- Following the plan's governing documents
-ERISA's prudence standards; fiduciaries must: - -1- Investigate and
evaluate decisions
2- Maintain records
3- Obtain expert assistance where necessary
-What ERISA section makes a fiduciary liable for another fiduciary's breach?
- -ERISA 405
-Primary rule of ERISA: - -- Plan is exclusively for the benefit of
participants/beneficiaries; and
- fiduciaries must operate plan for that purpose alone
-DOL Bulletin that established the difference between advice and education
- -Interpretive Bulletin 96-1
-DOL Bulletin that established difference of in essential education and
advice - -Interpretive Bulletin 96-1
-DOL regulation established the 5-part test for investment advice - -3-21(c)
-How many safe harbors are there for participant education to not be
deemed advice - -4
-Civil penalty for certain prohibited transactions under IRC 502(l) - -20%
penalty
and Answers
Fiduciary functions are those that involve what two things? - -1- Control (or
management of plan assets)
2- Administration (discretionary authority over plan operations)
-What are the 3 primary sets of rules that serve as foundation to fiduciary
responsibility? - -1- Exclusive Purpose Rule
2- Fiduciary standard of care
3- Prohibited Transactions Rule
-What established ERISA fiduciary standard of care? - -Section 404
-What are the 4 basic fiduciary standards? - -1- Loyalty
2- Prudence
3- Diversification
4- Following the plan's governing documents
-ERISA's prudence standards; fiduciaries must: - -1- Investigate and
evaluate decisions
2- Maintain records
3- Obtain expert assistance where necessary
-What ERISA section makes a fiduciary liable for another fiduciary's breach?
- -ERISA 405
-Primary rule of ERISA: - -- Plan is exclusively for the benefit of
participants/beneficiaries; and
- fiduciaries must operate plan for that purpose alone
-DOL Bulletin that established the difference between advice and education
- -Interpretive Bulletin 96-1
-DOL Bulletin that established difference of in essential education and
advice - -Interpretive Bulletin 96-1
-DOL regulation established the 5-part test for investment advice - -3-21(c)
-How many safe harbors are there for participant education to not be
deemed advice - -4
-Civil penalty for certain prohibited transactions under IRC 502(l) - -20%
penalty
