CPFA License Exam Graded A+ - (Certified Plan Fiduciary Advisor) (Practice Questions)

What are the 4 basic fiduciary standards under the Fiduciary Standard of Care? (Section 404) - ANSWER-1.) Loyalty - (Exclusive purpose rule - Providing benefits to participants and their beneficiaries; and defraying reasonable expenses of administering the plan) 2.) Prudence - (Act with prudence by investigating before making any plan decisions, documenting the decision-making process, hiring experts when they don't possess the knowledge or skills to make a decision, and monitoring if their decisions are still ideal based on the exclusive purpose rule and taking action if not 3.) Diversification - (Diversify investment in a prudent manner in order to minimize risk; Investment factors may include purpose of plan, amount of assets, investment acumen of the participants and participant demographics 4.) Following the plan's governing documents - (Follow plan documents to the extent that they are not contrary to ERISA rules) How many fiduciaries does a retirement plan? - ANSWER-All retirement plans have one or more fiduciaries Plan fiduciaries have a legal obligation to operate the plan on behalf of ...? (Primary rule of ERISA) - ANSWER-Plan participants and their beneficiaries, and not on behalf of owners, the employer, or key employees Who will almost always be a fiduciary to the plan? - ANSWER-1.) Plan Sponsor 2.) Plan Trustee 3.) Plan Administrator Which of these statements about personal liability is true? - ANSWER-*All fiduciaries have personal liability What does it meant to be a plan fiduciary? It means you have the responsibility to...? - ANSWER-1.) Act prudently 2.) Operate the plan according to the plan document 3.) Act exclusively in the interests of the plan participants and beneficiaries 4.) Run the plan for the exclusive purposes of providing benefits and paying plan expenses Which of the following is a fiduciary duty under ERISA? - ANSWER-*Following the plan's governing documents