CEBS - RPA 2 EXAM QUESTIONS AND
ANSWERS. VERIFIED 2025/2026.
Premature distributions from IRAs exempt from penalty if: - ANS Distribution occurred b/c of
IRS levy on account to pay taxes.
IRA qualified distributions include: - ANS Attained age 59 1/2; disabled; died and payment
made to beneficiary or estate; pay first-time home buyer expenses, not to exceed $10k.
Term used to describe condition that occurs b/c of different accrual patterns when traditional
DB plan converted to cash balance plan: - ANS Pension wear away
Section 409A - ANS IRC mandate that income from deferred comp arrangements not be
deferred beyond year in which comp is earned.
Qualified retirement plans required to have fidelity bond covering what %? - ANS 10%
Dollar cost averaging - ANS Involves investing the same amount of money on periodic basis,
whether over- or under-priced.
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Vesting provisions of executive retirement arrangements: - ANS varies depending on intent of
executive arrangement
Excess contribution to IRA subject to nondeductible excise tax of: - ANS 6%
Nonworking spouse may establish IRA using what types of payment as basis for eligibility? -
ANS Earned income of working spouse
Fiduciary liable for duly appointed and monitored investment mgr if performance of plan below
benchmark? - ANS Not liable since investment mgmt svcs delegated
Typical range for % of earnings credited under % of earnings per year formula? - ANS 1% to
1.25%
Tax treatment of NQSO (NQ stock options) for ER: - ANS ER gets corporate income tax
deduction for amount of comp income EE realizes at exercise of option.
Penalty for failure to make required distribution of at least correct amount from qualified
retirement plan: - ANS Nondeductible excise tax of 50%
EEs w/drawing contributions from SIMPLE IRA during initial two-year period, subject to penalty
of: - ANS 25%
When qualified plan hold ER securities, max amount for fidelity bond is: - ANS Increased by a
significant amount
Taxable amount received before 59 1/2 from qualified plan subject to additional penalty of: -
ANS 10%
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
ANSWERS. VERIFIED 2025/2026.
Premature distributions from IRAs exempt from penalty if: - ANS Distribution occurred b/c of
IRS levy on account to pay taxes.
IRA qualified distributions include: - ANS Attained age 59 1/2; disabled; died and payment
made to beneficiary or estate; pay first-time home buyer expenses, not to exceed $10k.
Term used to describe condition that occurs b/c of different accrual patterns when traditional
DB plan converted to cash balance plan: - ANS Pension wear away
Section 409A - ANS IRC mandate that income from deferred comp arrangements not be
deferred beyond year in which comp is earned.
Qualified retirement plans required to have fidelity bond covering what %? - ANS 10%
Dollar cost averaging - ANS Involves investing the same amount of money on periodic basis,
whether over- or under-priced.
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Vesting provisions of executive retirement arrangements: - ANS varies depending on intent of
executive arrangement
Excess contribution to IRA subject to nondeductible excise tax of: - ANS 6%
Nonworking spouse may establish IRA using what types of payment as basis for eligibility? -
ANS Earned income of working spouse
Fiduciary liable for duly appointed and monitored investment mgr if performance of plan below
benchmark? - ANS Not liable since investment mgmt svcs delegated
Typical range for % of earnings credited under % of earnings per year formula? - ANS 1% to
1.25%
Tax treatment of NQSO (NQ stock options) for ER: - ANS ER gets corporate income tax
deduction for amount of comp income EE realizes at exercise of option.
Penalty for failure to make required distribution of at least correct amount from qualified
retirement plan: - ANS Nondeductible excise tax of 50%
EEs w/drawing contributions from SIMPLE IRA during initial two-year period, subject to penalty
of: - ANS 25%
When qualified plan hold ER securities, max amount for fidelity bond is: - ANS Increased by a
significant amount
Taxable amount received before 59 1/2 from qualified plan subject to additional penalty of: -
ANS 10%
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
