©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
NFP Exam #2 Chapter 8 Questions And
Answers |Latest 2025 | Guaranteed Pass.
Agency Funds - Answer✔Funds consisting of resources received and held by the government as
an agent for others. (i.e. collecting taxes) Sometimes resources held by a government for other
organizations are handled through an agency fund known as a pass-through agency fund.
Agent Multiple Employer Pension Plan - Answer✔A pension plan under which plan assets of
numerous employers are pooled for investment purposes but accounts are maintained for the
individual employer participants.
Cost-Sharing Multiple-Employer Pension Plan - Answer✔A pension plan under which the
pension obligations of many employers are pooled. The plan assets can be used to pay the
benefits to employees of any employer that provides pensions through the pension plan.
Covered Payroll - Answer✔The amount of payroll on which contributions to a pension plans are
based.
Defined Benefit Plan - Answer✔A pension plan that provides a specified amount of benefits
based on a formula that may include factors such as age, salary, and years of employment.
Defined Contribution Plan - Answer✔A pension plan that specifies the amount or rate of
contribution, often a percentage of covered salary, that the employer and employees must
contribute to the members' accounts.
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, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
Derivatives - Answer✔A financial instrument or other contract that has one or more reference
rates and one or more notional amounts (i.e. face amount), requires little or no initial
investment, and requires or permits net settlement.
External Investment Pool - Answer✔Centrally managed investment portfolios (pools) that
manage the investments of participants (i.e. other governments and NFP organizations) outside
the reporting entity of the government that administers the pool.
Investment Trust Funds - Answer✔Funds used to account for the assets, liabilities, net position,
and changes in net position corresponding to the equity of the external participants.
Multiple-Employer Pension Plans - Answer✔Pension plans under which benefits are provided to
the employees of more than one employer.
Net Pension Liability - Answer✔The difference between the total pension liability and plan
fiduciary net position.
Other Postemployment Benefits (OPEB) - Answer✔Benefits, other than pensions, provided to
employees subsequent to employment. Included would be items such as health care and life
insurance.
Public Employee Retirement Systems (PERS) - Answer✔The organizations that collect
retirement and other employee benefit contributions from government employers and
employees, manage assets, and make payments to qualified retirants, beneficiaries, and
disabled employees.
Service Cost - Answer✔The portion of the actuarial present value of projected pension benefit
payments that is attributed to the current year.
Single-Employer Pension Plan - Answer✔Pension plan under which benefits are provided only
to employees of the employer.
2|P a g e
NFP Exam #2 Chapter 8 Questions And
Answers |Latest 2025 | Guaranteed Pass.
Agency Funds - Answer✔Funds consisting of resources received and held by the government as
an agent for others. (i.e. collecting taxes) Sometimes resources held by a government for other
organizations are handled through an agency fund known as a pass-through agency fund.
Agent Multiple Employer Pension Plan - Answer✔A pension plan under which plan assets of
numerous employers are pooled for investment purposes but accounts are maintained for the
individual employer participants.
Cost-Sharing Multiple-Employer Pension Plan - Answer✔A pension plan under which the
pension obligations of many employers are pooled. The plan assets can be used to pay the
benefits to employees of any employer that provides pensions through the pension plan.
Covered Payroll - Answer✔The amount of payroll on which contributions to a pension plans are
based.
Defined Benefit Plan - Answer✔A pension plan that provides a specified amount of benefits
based on a formula that may include factors such as age, salary, and years of employment.
Defined Contribution Plan - Answer✔A pension plan that specifies the amount or rate of
contribution, often a percentage of covered salary, that the employer and employees must
contribute to the members' accounts.
1|P a g e
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
Derivatives - Answer✔A financial instrument or other contract that has one or more reference
rates and one or more notional amounts (i.e. face amount), requires little or no initial
investment, and requires or permits net settlement.
External Investment Pool - Answer✔Centrally managed investment portfolios (pools) that
manage the investments of participants (i.e. other governments and NFP organizations) outside
the reporting entity of the government that administers the pool.
Investment Trust Funds - Answer✔Funds used to account for the assets, liabilities, net position,
and changes in net position corresponding to the equity of the external participants.
Multiple-Employer Pension Plans - Answer✔Pension plans under which benefits are provided to
the employees of more than one employer.
Net Pension Liability - Answer✔The difference between the total pension liability and plan
fiduciary net position.
Other Postemployment Benefits (OPEB) - Answer✔Benefits, other than pensions, provided to
employees subsequent to employment. Included would be items such as health care and life
insurance.
Public Employee Retirement Systems (PERS) - Answer✔The organizations that collect
retirement and other employee benefit contributions from government employers and
employees, manage assets, and make payments to qualified retirants, beneficiaries, and
disabled employees.
Service Cost - Answer✔The portion of the actuarial present value of projected pension benefit
payments that is attributed to the current year.
Single-Employer Pension Plan - Answer✔Pension plan under which benefits are provided only
to employees of the employer.
2|P a g e
