CPFA Exam Newest Exam 2026 | All Questions
and Correct Answers | Graded A+ | Verified
Answers | Just Released
Which statement regarding service providers is TRUE?
A) A TPA performs annual compliance testing.
B) A recordkeeper has the legal obligation to provide an interpretation of a plan
provision.
C) An accountant processes the "money out" for a participant account.
D) A plan advisor is responsible for drafting annual safe harbor notices. ---------
CORRECT ANSWER-----------------A) A TPA performs annual compliance testing.
Which statement regarding bundled service arrangements is TRUE?
A) Provides efficient contribution and distribution processes.
B) Requires less fiduciary oversight than an unbundled service arrangement.
C) Permits for specific single provider within the arrangement to be easily
removed and replaced with another provider.
D) Typical arrangement involves a TPA and an insurance company. ---------
CORRECT ANSWER-----------------A) Provides efficient contribution and distribution
processes.
,Based on behavioral finance research, which of the following is a best practice for
producing successful participant outcomes?
A) Combining auto-enrollment with targeted education.
B) Adding a self-directed brokerage option.
C) Re-enrolling all participants into equity investments.
D) Offering group meetings that focus on participants' rational decision making. --
-------CORRECT ANSWER-----------------A) Combining auto-enrollment with targeted
education.
Company ABC and Company DEF are determined to be part of a related group of
companies. All the following are TRUE except:
A) The employees of both ABC and DEF may end up participating in one plan.
B) ABC may be required to make contributions for its employees into DEF's plan.
C) DEF has the right to "opt out" and be excluded from the related group.
D) If DEF adopts a plan, ABC employees may be eligible for the plan. ---------
CORRECT ANSWER-----------------C) DEF has the right to "opt out" and be excluded
from the related group.
Which of the following plan designs may result in better participant deferral
behavior?
A) Adding an employer matching contribution equal to 25% up to 12% of
compensation deferred.
,B) Adding a 3% nonelective safe harbor contribution.
C) Adding a 1,000 hours of service requirement to receive the employer matching
contribution.
D) Adding a profit-sharing contribution. ---------CORRECT ANSWER-----------------A)
Adding an employer matching contribution equal to 25% up to 12% of
compensation deferred.
An advisor is meeting with a Plan Sponsor to discuss contribution design in her
plan. All of the following questions will help with this conversation, EXCEPT:
A) Is there a goal that employees should be required to contribute to receive an
employer contribution?
B) Can participants convert their existing contribution accounts to Roth accounts?
C) Is there a group of employees who are unlikely to participate in the plan?
D) How important is it that employees are on track for adequate retirement
income? ---------CORRECT ANSWER-----------------B) Can participants convert their
existing contribution accounts to Roth accounts?
Jake is a sole proprietor and has just established a software development
company. He has recently hired two employees. Currently, the company does not
have a good cash flow, but if Jake can hire more software engineers, growth and
profits should increase. Based on that information, all of the following are
questions that an advisor should ask when establishing a plan for Jake's company,
EXCEPT:
A) Can the company's current cash flow support employer contributions?
, B) Does the company have an established line of credit?
C) What are Jake's objectives for attracting future employees?
D) Is Jake willing to make a fixed contribution if it enables him to save more? ------
---CORRECT ANSWER-----------------B) Does the company have an established line of
credit?
A partnership is a business that:
A) Cannot have a limited liability structure.
B) Has at least two partners.
C) Is typically run by a board of directors.
D) Reports income on form 1120. ---------CORRECT ANSWER-----------------B) Has at
least two partners.
All of the following describe the impact of a business's cash flow and budget when
establishing a plan, EXCEPT:
A) A plan advisor should inform the employer that required contributions will be
waived for any year that the company does not make a profit.
B) A plan advisor should explain a plan's contribution commitment to the
employer.
C) Employers should have a stable cash flow if they are considering adopting a
Defined Benefit/Defined Contribution combination plan.
D) A plan advisor may work with the service provider to show estimates of what
employer contributions would be under different contribution formulas. ---------
and Correct Answers | Graded A+ | Verified
Answers | Just Released
Which statement regarding service providers is TRUE?
A) A TPA performs annual compliance testing.
B) A recordkeeper has the legal obligation to provide an interpretation of a plan
provision.
C) An accountant processes the "money out" for a participant account.
D) A plan advisor is responsible for drafting annual safe harbor notices. ---------
CORRECT ANSWER-----------------A) A TPA performs annual compliance testing.
Which statement regarding bundled service arrangements is TRUE?
A) Provides efficient contribution and distribution processes.
B) Requires less fiduciary oversight than an unbundled service arrangement.
C) Permits for specific single provider within the arrangement to be easily
removed and replaced with another provider.
D) Typical arrangement involves a TPA and an insurance company. ---------
CORRECT ANSWER-----------------A) Provides efficient contribution and distribution
processes.
,Based on behavioral finance research, which of the following is a best practice for
producing successful participant outcomes?
A) Combining auto-enrollment with targeted education.
B) Adding a self-directed brokerage option.
C) Re-enrolling all participants into equity investments.
D) Offering group meetings that focus on participants' rational decision making. --
-------CORRECT ANSWER-----------------A) Combining auto-enrollment with targeted
education.
Company ABC and Company DEF are determined to be part of a related group of
companies. All the following are TRUE except:
A) The employees of both ABC and DEF may end up participating in one plan.
B) ABC may be required to make contributions for its employees into DEF's plan.
C) DEF has the right to "opt out" and be excluded from the related group.
D) If DEF adopts a plan, ABC employees may be eligible for the plan. ---------
CORRECT ANSWER-----------------C) DEF has the right to "opt out" and be excluded
from the related group.
Which of the following plan designs may result in better participant deferral
behavior?
A) Adding an employer matching contribution equal to 25% up to 12% of
compensation deferred.
,B) Adding a 3% nonelective safe harbor contribution.
C) Adding a 1,000 hours of service requirement to receive the employer matching
contribution.
D) Adding a profit-sharing contribution. ---------CORRECT ANSWER-----------------A)
Adding an employer matching contribution equal to 25% up to 12% of
compensation deferred.
An advisor is meeting with a Plan Sponsor to discuss contribution design in her
plan. All of the following questions will help with this conversation, EXCEPT:
A) Is there a goal that employees should be required to contribute to receive an
employer contribution?
B) Can participants convert their existing contribution accounts to Roth accounts?
C) Is there a group of employees who are unlikely to participate in the plan?
D) How important is it that employees are on track for adequate retirement
income? ---------CORRECT ANSWER-----------------B) Can participants convert their
existing contribution accounts to Roth accounts?
Jake is a sole proprietor and has just established a software development
company. He has recently hired two employees. Currently, the company does not
have a good cash flow, but if Jake can hire more software engineers, growth and
profits should increase. Based on that information, all of the following are
questions that an advisor should ask when establishing a plan for Jake's company,
EXCEPT:
A) Can the company's current cash flow support employer contributions?
, B) Does the company have an established line of credit?
C) What are Jake's objectives for attracting future employees?
D) Is Jake willing to make a fixed contribution if it enables him to save more? ------
---CORRECT ANSWER-----------------B) Does the company have an established line of
credit?
A partnership is a business that:
A) Cannot have a limited liability structure.
B) Has at least two partners.
C) Is typically run by a board of directors.
D) Reports income on form 1120. ---------CORRECT ANSWER-----------------B) Has at
least two partners.
All of the following describe the impact of a business's cash flow and budget when
establishing a plan, EXCEPT:
A) A plan advisor should inform the employer that required contributions will be
waived for any year that the company does not make a profit.
B) A plan advisor should explain a plan's contribution commitment to the
employer.
C) Employers should have a stable cash flow if they are considering adopting a
Defined Benefit/Defined Contribution combination plan.
D) A plan advisor may work with the service provider to show estimates of what
employer contributions would be under different contribution formulas. ---------
