Segregated Funds & Annuities Mock Exam –
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Terms in this set (31)
Group Registered GRRSPs offer investors a limited variety of
Retirement Savings Plan investment choices, but they have lower fees
(GRRSP) compared with individual RRSPs.
An investor may cancel or rescind the segregated
fund contract in writing within the specific time
limitation set by the insurer providing the contract.
Cancellation of
Two days is the usual length of time permitted. The
Segregated Fund
investor receives the lesser of the amount of
Contract
premium paid or value of fund units on that date if it
is a valuation date. If it is not a valuation date, then
the value on the next valuation date applies.
A lifetime limit of 25% of the value of the qualifying
plan, to a total of $150,000 applies to ALDA
purchases. The ALDA has the ability to defer
Advanced Deferred Life payments until the end of the year in which the
Annuity (ADLA) annuitant reaches 85. Therefore, the ALDA
addresses longevity risk and ensures that investors
with an RRIF do not deplete their savings
prematurely during retirement.
Because the money in the DCPP is locked in, it can
only be transferred into another locked-in account
Defined Contribution or left in the current DCPP.
Pension Plan (DCPP)
A variable payment life annuity is an option for
members of a DCPP.
, The minimum percentage of an RRIF account that
Registered Retirement must be withdrawn yearly starts at age 65 and
Investment Fund (RRIF) extends until age 95. The percentage range starts at
4% at age 65 and goes to 20% at age 95. (4.7.2)
Groups that offer savings and investment plans to
their members include employers, associations, and
fraternal organizations. Group plans are most often
associated with employers. The six fundamental
types of group savings plans are:
Group Savings Plans Defined benefit pension plan (DBPP)
Defined contribution pension plan (DCPP)
Group registered retirement savings plan (GRRSP)
Deferred profit sharing plan (DPSP)
Tax-free savings account (TFSA)
Pooled registered pension plan (PRPP)
Deferred Profit Sharing Plan (DPSP) cannot be
Deferred Profit Sharing withdrawn with the Home Buyers Plan (HBP), and a
Plan (DPSP) withdrawal from the DPSP would trigger income
taxes.
Balanced funds are also known as balanced growth
or balanced income funds. A balanced growth fund
emphasizes stocks. A balanced income fund
emphasizes bonds. A balanced income fund would
invest in more bonds than equities, providing mostly
Balanced Funds
income, but some growth. A balanced growth fund
would primarily provide growth with some income,
while a small-cap fund would provide only growth
and a money market fund would provide minimal
income and no growth.
Transfers are made directly from each type of plan if
the plan administrator has established a VPLA
arrangement. A minimum of 10 retired members is
required to implement the annuity. The VPLA
Variable Payment Life
requires that periodic payments begin by the end of
Annuity (VPLA)
the year in which the member turns 71 or the end of
the calendar year in which the VPLA is acquired. This
form of annuity may be subject to provincial pension
benefits standards legislation.
Questions With A+ Solutions
Save
Terms in this set (31)
Group Registered GRRSPs offer investors a limited variety of
Retirement Savings Plan investment choices, but they have lower fees
(GRRSP) compared with individual RRSPs.
An investor may cancel or rescind the segregated
fund contract in writing within the specific time
limitation set by the insurer providing the contract.
Cancellation of
Two days is the usual length of time permitted. The
Segregated Fund
investor receives the lesser of the amount of
Contract
premium paid or value of fund units on that date if it
is a valuation date. If it is not a valuation date, then
the value on the next valuation date applies.
A lifetime limit of 25% of the value of the qualifying
plan, to a total of $150,000 applies to ALDA
purchases. The ALDA has the ability to defer
Advanced Deferred Life payments until the end of the year in which the
Annuity (ADLA) annuitant reaches 85. Therefore, the ALDA
addresses longevity risk and ensures that investors
with an RRIF do not deplete their savings
prematurely during retirement.
Because the money in the DCPP is locked in, it can
only be transferred into another locked-in account
Defined Contribution or left in the current DCPP.
Pension Plan (DCPP)
A variable payment life annuity is an option for
members of a DCPP.
, The minimum percentage of an RRIF account that
Registered Retirement must be withdrawn yearly starts at age 65 and
Investment Fund (RRIF) extends until age 95. The percentage range starts at
4% at age 65 and goes to 20% at age 95. (4.7.2)
Groups that offer savings and investment plans to
their members include employers, associations, and
fraternal organizations. Group plans are most often
associated with employers. The six fundamental
types of group savings plans are:
Group Savings Plans Defined benefit pension plan (DBPP)
Defined contribution pension plan (DCPP)
Group registered retirement savings plan (GRRSP)
Deferred profit sharing plan (DPSP)
Tax-free savings account (TFSA)
Pooled registered pension plan (PRPP)
Deferred Profit Sharing Plan (DPSP) cannot be
Deferred Profit Sharing withdrawn with the Home Buyers Plan (HBP), and a
Plan (DPSP) withdrawal from the DPSP would trigger income
taxes.
Balanced funds are also known as balanced growth
or balanced income funds. A balanced growth fund
emphasizes stocks. A balanced income fund
emphasizes bonds. A balanced income fund would
invest in more bonds than equities, providing mostly
Balanced Funds
income, but some growth. A balanced growth fund
would primarily provide growth with some income,
while a small-cap fund would provide only growth
and a money market fund would provide minimal
income and no growth.
Transfers are made directly from each type of plan if
the plan administrator has established a VPLA
arrangement. A minimum of 10 retired members is
required to implement the annuity. The VPLA
Variable Payment Life
requires that periodic payments begin by the end of
Annuity (VPLA)
the year in which the member turns 71 or the end of
the calendar year in which the VPLA is acquired. This
form of annuity may be subject to provincial pension
benefits standards legislation.
