CPFA EXAM QUESTIONS & ANSWERS
Which Statement regarding service providers is TRUE? - Answer -1. A TPA performs
annual compliance testing 2. A recordkeeper has the legal obligation to provide an
interpretation of a plan provision. 3. An accountant processes the "money out" for a
participant withdrawal. 4. A plan advisor is responsible for drafting annual safe harbor
notices.
1.
all of the following are important factors when selecting a service provider, EXCEPT: -
Answer -1. Service provider's financial stability. 2. experience with plans of similar size
and complexity. 3. willingness to provide revenue sharing to offset plan fees. 4.
qualifications of personnel that will service the plan
3.
which statement regarding bundled service arrangements is TRUE? - Answer -1.
Provides efficient contribution and distribution processes. 2. requires less fiduciary
oversight than an unbundled service arrangement. 3. permits for a specific single
provider within the arrangement to be easily removed and replaced with another
provider. 4. typical arrangement involves a TPA and an insurance company?
1.
company abc and company def are determined to be part of a related group of
companies. all of the following statements are TRUE, EXCEPT: - Answer -1. the
employees of both abc and def may end up participating in one plan. 2. abc may be
required to make contributions for its employees in def's plan. def has the right to "opt
out" and be excluded from the related group. 4. if def adopts a plan, abc employees
may be eligible for the plan.
3.
which of the following plan deigns may result in better participant deferral behavior? 1.
adding an employer matching contribution equal to 25% up to 12% of compensation
deferred. 2. adding a 3% nonelective safe harbor contribution. 3. adding a profit sharing
contribution - Answer -1.
an advisor is meeting with a plan sponsor to discuss contribution in her plan. all of the
following questions will help with this conversation, EXCEPT - Answer -1. is there a
goal that employees should be required to contribute to receive an employer
contribution? 2. Can participants convert their existing contribution accounts to roth
, accounts? 3. Is there a group of employees who are unlikely to participate in the plan?
How important is it that employees are on track for adequate retirement income?
2.
all of the following service providers may assist with plan document maintenance,
except - Answer -1. ERISA attorney. 2. Recordkeeper. 3. TPA firm. 4. Plan auditor
4.
which statement regarding to and through target date funds are true? - Answer -1. if a
majority of participants cash out of a plan upon retirement, a through strategy may be
appropriate. 2. a to target date fund may be a good choice if many retirees have
account balances in the plan. 3. a key difference between to and through target date
funds are their glide paths. 4. a through target date fund develops its asset allocation
based on the participant's risk tolerance.
3.
All of the following are characteristics of target date funds except, : - Answer -1. they
are designed so that the equity portion decreases as the fund nears a specified date. 2.
they are diversified to minimize the risk of large losses. 3. they can be used to reduce
fiduciary liability under the QDIA rules. 4. they require less fiduciary oversight than other
types of funds.
4.
all of the following statements regarding the timing of investment meetings are true,
except: - Answer -1. an investment policy statement (IPS) must specifically state how
often the investments are reviewed. 2. a plan advisor may assist in the scheduling of
investment meetings. 3. an IPS should be reviewed at least annually. 4. smaller, owner-
driven plans typically perform an annual investment review.
4.
which statement regarding investment options is true? - Answer -1. asset allocation
funds are designed to be the sole investment for a participant. 2. Collective investment
funds are managed by insurance companies. 3. Balanced funds are designed to shift to
more conservative investments as the participant ages. 4. Stable value funds are a
good choice for a qualified default investment alternative.
1.
Which Statement regarding service providers is TRUE? - Answer -1. A TPA performs
annual compliance testing 2. A recordkeeper has the legal obligation to provide an
interpretation of a plan provision. 3. An accountant processes the "money out" for a
participant withdrawal. 4. A plan advisor is responsible for drafting annual safe harbor
notices.
1.
all of the following are important factors when selecting a service provider, EXCEPT: -
Answer -1. Service provider's financial stability. 2. experience with plans of similar size
and complexity. 3. willingness to provide revenue sharing to offset plan fees. 4.
qualifications of personnel that will service the plan
3.
which statement regarding bundled service arrangements is TRUE? - Answer -1.
Provides efficient contribution and distribution processes. 2. requires less fiduciary
oversight than an unbundled service arrangement. 3. permits for a specific single
provider within the arrangement to be easily removed and replaced with another
provider. 4. typical arrangement involves a TPA and an insurance company?
1.
company abc and company def are determined to be part of a related group of
companies. all of the following statements are TRUE, EXCEPT: - Answer -1. the
employees of both abc and def may end up participating in one plan. 2. abc may be
required to make contributions for its employees in def's plan. def has the right to "opt
out" and be excluded from the related group. 4. if def adopts a plan, abc employees
may be eligible for the plan.
3.
which of the following plan deigns may result in better participant deferral behavior? 1.
adding an employer matching contribution equal to 25% up to 12% of compensation
deferred. 2. adding a 3% nonelective safe harbor contribution. 3. adding a profit sharing
contribution - Answer -1.
an advisor is meeting with a plan sponsor to discuss contribution in her plan. all of the
following questions will help with this conversation, EXCEPT - Answer -1. is there a
goal that employees should be required to contribute to receive an employer
contribution? 2. Can participants convert their existing contribution accounts to roth
, accounts? 3. Is there a group of employees who are unlikely to participate in the plan?
How important is it that employees are on track for adequate retirement income?
2.
all of the following service providers may assist with plan document maintenance,
except - Answer -1. ERISA attorney. 2. Recordkeeper. 3. TPA firm. 4. Plan auditor
4.
which statement regarding to and through target date funds are true? - Answer -1. if a
majority of participants cash out of a plan upon retirement, a through strategy may be
appropriate. 2. a to target date fund may be a good choice if many retirees have
account balances in the plan. 3. a key difference between to and through target date
funds are their glide paths. 4. a through target date fund develops its asset allocation
based on the participant's risk tolerance.
3.
All of the following are characteristics of target date funds except, : - Answer -1. they
are designed so that the equity portion decreases as the fund nears a specified date. 2.
they are diversified to minimize the risk of large losses. 3. they can be used to reduce
fiduciary liability under the QDIA rules. 4. they require less fiduciary oversight than other
types of funds.
4.
all of the following statements regarding the timing of investment meetings are true,
except: - Answer -1. an investment policy statement (IPS) must specifically state how
often the investments are reviewed. 2. a plan advisor may assist in the scheduling of
investment meetings. 3. an IPS should be reviewed at least annually. 4. smaller, owner-
driven plans typically perform an annual investment review.
4.
which statement regarding investment options is true? - Answer -1. asset allocation
funds are designed to be the sole investment for a participant. 2. Collective investment
funds are managed by insurance companies. 3. Balanced funds are designed to shift to
more conservative investments as the participant ages. 4. Stable value funds are a
good choice for a qualified default investment alternative.
1.
