CEBS: GBA/RPA 3 new curriculum UPDATED QUESTIONS WITH COMPLETE ANSWERS!!

CEBS: GBA/RPA 3 new curriculum
Three types of fraud risk - CORRECT ANSWER-1) incentives to commit fraud
2) opportunities to carry out fraud
3) attitudes and rationalizations to justify the fraud

Common methods of detecting fraud - CORRECT ANSWER-Internal Audit
Management review
Reconciliations
External Audit
Surveillance
Confessions

Depts most/least likely to have fraud - CORRECT ANSWER-MOST likely: Accounting,
operations, upper management
LEAST likely: HR, legal, BOD

SOA/SCL-Retirement Income Generators (RIGs) - CORRECT ANSWER-1) SWP
2) Guaranteed lifetime annuities through insurance
3) Temp payout from plan assets that delays SS in order to increase total retirement
income

Due Diligence-convert DC assets to retirement income - CORRECT ANSWER-a)
assess needs and responsibilities
b)learn about RIGs
c)learn what can be supported by current plan sponsor
d) develop criteria for retirement income program, and assess how each RIG meets
criteria
e) develop a timetable

QLAC-which plans - CORRECT ANSWER-Only DC plans (401k, 403b, IRAs, 457b)

QLAC-Maximum Premium - CORRECT ANSWER-Lesser of $125k of 25% of aggregate
account balance

QLAC-prohibited features - CORRECT ANSWER-Variable contracts, indexed contracts,
contracts with commutation benefits or cash surrender values. Restrictions on death
benefits

MPT and diversification requirement - CORRECT ANSWER-Risk/reward. MPT is a
bedrock tenet of ERISA, the diversification aspect is impt; reduces risk of large losses.

, IPS for Innovative Investments - CORRECT ANSWER-Not required, but good practice
-more detailed
-flexible
-not too detailed that it requires updates
-designed so as not to increase risk of failure
-carefully drafted
-written in context of meeting needs of ppts



Plan document should include: - CORRECT ANSWER-(a) The name(s) of the plan
fiduciary(ies)
(b) Policies and procedures relating to plan administration
(c) Funding requirements
(d) A description of how benefit payments will be made
(e) Claims and appeals procedures
(f) Plan amendment and termination authority and procedures
(g) Method for distribution of plan assets upon plan termination
(h) A statement that plan assets can be used to pay reasonable costs of plan
administration.

Plan Document - CORRECT ANSWER-No set requirements; include plan name,
fiduciary, claims review procedures; funding; eligibility

Summary of Material Modification (SMM) - CORRECT ANSWER-Must be delivered
within 210 days after the end of the plan year, or within 60 days after a "material
reduction" in benefits of a group health plan. penalty up to $110/day for not delivering
within 30 of ppt/beneficiary's request

Social Insurance-Fully Insured - CORRECT ANSWER-40 credits/quarters of coverage
1 credit for each $x earned (2017-$1300)
Adjusted for inflation
Must be fully insured to be eligible for retirement benefits

Currently Insured - CORRECT ANSWER-At least 6 credits in last 13 calendar quarters
ending with quarter of death, disability, or entitlement to retirement benefits.

Disability Insured - CORRECT ANSWER-Two work tests: 1) recent work test; depends
on age at disability. and 2)duration of work test (doesn't require work within a certain
period of time)

FASB ASC 960 - CORRECT ANSWER-Defined Benefit Plans; establishes the
accounting and financial reporting standards.
Under DOL
ERs can file one set