CPFA EXAM<\/p>\n\n\n\n
All of the following statements describe the re-enrollment process of
reinvesting participant accounts in the plan’s asset allocation funds,
EXCEPT:
A) The re-enrollment of participant accounts is considered a behavioral
finance method.
B) Participants are given the opportunity to “opt-out” of the re\u0002enrollment of their account balances.
C) The goal of the re-enrollment process is to improve participant
outcomes by automatically investing their account balances in asset
allocation funds appropriate for their age.
D) Participant notices are not required. – ANSWER- D) Participant
notices are not required.
Which statement regarding IRA plans and 401k plans is TRUE?
A) SIMPLE IRA plans are used to maximize plan benefits to owners.
B) SIMPLE IRAs and 401ks have the same plan document
requirements.<\/p>\n\n\n\n
C) Participant loans are allowed from a SIMPLE 401k plan but not a
SIMPLE IRA.
D) An employer may sponsor a SIMPLE IRA and a 401k plan in the
same calendar year. – ANSWER- C) Participant loans are allowed from
a SIMPLE 401k plan but not a SIMPLE IRA.
A traditional 401k plan maybe an appropriate choice for all of the
following employers, EXCEPT:
A) An employer who feels strongly that his or her employees should
take an active role in saving for retirement.
B) An employer whose first priority is to maximize his or her retirement
savings.
C) An employer who is paternalistic and wants to help employees save
by enacting automatic enrollment provisions.
D) An employer who wants to encourage employee participation with
matching contributions. – ANSWER- B) An employer whose first
priority is to maximize his or her retirement savings.
An owner-driven plan sponsor wants to retire in five to ten years. His
company has a stable cash flow and ten employees. All of the following
plan designs are compatible with the owner’s goals, EXCEPT:
A) 401 (k) cross-tested safe harbor plan
B) Defined benefit\/defined contribution combination plan
C) 401(k) safe harbor plan<\/p>\n\n\n\n
D) SIMPLE IRA – ANSWER- D) SIMPLE IRA
An owner-driven plan sponsor wants to know the advantages of a safe
harbor 401(k) plan. All of the following are advantages EXCEPT:
A) Safe harbor contributions can exempt the plan from the ADP test.
B) Safe harbor contributions may be taken as a hardship withdrawal.
C) Safe harbor contributions are discretionary.
D) Safe harbor contributions can satisfy top-heavy minimum
contribution requirements. – ANSWER- C) Safe harbor contributions are
discretionary.
All of the following plan features are typically located in the plan’s
adoption agreement, EXCEPT:
A) Availability of participant loans
B) Availability of in-service withdrawals
C) Matching contribution formula
D) Definition of ERISA fiduciary roles and responsibilities – ANSWER\u0002D) Definition of ERISA fiduciary roles and responsibilities
All of the following are advantages of the request for proposal (RFP)
process in a participant-driven plan, EXCEPT:<\/p>\n\n\n\n
A) The RFP allows the fiduciaries to delegate the selection of finalists to
the plan advisor and the TPA.
B) Plan advisor can assist the fiduciaries in compiling a list of potential
service providers.
C) Fiduciaries can make an “apples to apples” comparison of fees and
services.
D) The RFP and the responses can be part of the documentation that a
prudent process was followed. – ANSWER- A) The RFP allows the
fiduciaries to delegate the selection of finalists to the plan advisor and
the TPA.
All of the following service providers may assist with plan document
maintenance, EXCEPT:
A) ERISA attorney
B) Recordkeeper
C) TPA firm
D) Plan auditor – ANSWER- D) Plan auditor
All of the following describe the required participant disclosure process,
EXCEPT:
A) The Plan Administrator or Plan Sponsor can hire a 3(16) fiduciary to
distribute required participant notices.
B) The party that distributes required notices to participants is
considered a fiduciary.<\/p>\n\n\n\n