CPFA EXAM QUESTIONS AND ANSWERS RATED A.CPFA EXAM QUESTIONS AND ANSWERS RATED A.CPFA EXAM QUESTIONS AND ANSWERS RATED A.CPFA EXAM QUESTIONS AND ANSWERS RATED A.

CPFA EXAM 1

Employee Retirement Income Security Act (ERISA)

Established 1974

ERISA was passed to establish

A set of federally-regulated provisions with the primary purpose of protecting

participants and beneficiaries

ERISA had the important function of

Pre-empting the patchwork of state fiduciary laws

Before ERISA

Workers had no legal rights to their benefits

Before ERISA benefits were

Seen as a reward for those who were loyal to a company their entire career

ERISA established when an employee

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

DOL & IRS

ERISA established two important concepts

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

Pension Benefit Guaranty Corporation

ERISA consists of four numbered sections known as Titles

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

The individual or entity that creates the trust

Holds employee deferrals and employer contributions

Settlor functions

Typically relate to plan design

Settlor functions are not

Subject to fiduciary duty

Fiduciary functions are those that

Involve the control and administration of the plan or its assets

Named Fiduciaries

Plan Sponsor

Trustee

Plan Administrator

Under ERISA a plan must name

at least one individual or provide a procedure for identifying who is responsible for

operating the plan

Plan Sponsor

Overseas all other fiduciaries

May appoint one or more fiduciaries to operate the plan

Replace fiduciaries if they fail to perform their duties

Levels of atmosphere (Bottom to top)

Troposphere, Tropopause, Stratosphere

Troposphere altitudes

Surface to 30,000ft

Tropopause altitudes

30,000-60,000ft

Stratopause altitudes

>50km

Troposphere Environmental temp lapse rate

2C(1.98C)/1000ft

Troposphere Environmental pressure lapse rate

1hPa/30ft

Tropopause convection remarks