CPFA 1 Exam Questions with correct Answers 2023

Employee Retirement Income Security Act (ERISA) - Answer- Established 1974 ERISA was passed to establish - Answer- A set of federally-regulated provisions with the primary purpose of protecting participants and beneficiaries ERISA had the important function of - Answer- Pre-empting the patchwork of state fiduciary laws Before ERISA - Answer- Workers had no legal rights to their benefits Before ERISA benefits were - Answer- Seen as a reward for those who were loyal to a company their entire career ERISA established when an employee - Answer- Is allowed to participate in a plan How long an employee be required to wait before being entitled to benefits How much & how often an employer must contribute to the plan What information about the plan must be disclosed to participants Rules of conduct for those administering the plan and it assets Avenues for enforcing qualified plan rules ERISA provisions are overseen by - Answer- DOL & IRS ERISA established two important concepts - Answer- Plan termination insurance for defined benefit plans & Individual Retirement Accounts for taxpayers not covered by an employers qualified plan Who administers plan termination insurance for defined benefit plans - Answer- Pension Benefit Guaranty Corporation ERISA consists of four numbered sections known as Titles - Answer- Title 1: Protection of Employee Rights under Employee Benefit Plans Title 2: Specific Conditions for Tax Qualification of Qualified Retirement Plans Title 3: Jurisdiction, Administration, and Enforcement of ERISA Title 4: Pension Benefit Guarantee Corporation and Termination Insurance Programs for Defined Benefit Plans The Settlor is - Answer- The individual or entity that creates the trust Holds employee deferrals and employer contributions Settlor functions - Answer- Typically relate to plan design Settlor functions are not - Answer- Subject to fiduciary duty Fiduciary functions are those that - Answer- Involve the control and administration of the plan or its assets Named Fiduciaries - Answer- Plan Sponsor Trustee Plan Administrator Under ERISA a plan must name - Answer- at least one individual or provide a procedure for identifying who is responsible for operating the plan Plan Sponsor - Answer- Overseas all other fiduciaries May appoint one or more fiduciaries to operate the plan Replace fiduciaries if they fail to perform their duties