CPFA Exam QUESTIONS AND ANSWERS

A) A TPA performs annual compliance testing. - Answer- Which statement regarding service providers is TRUE? A) A TPA performs annual compliance testing. B) A recordkeeper has the legal obligation to provide an interpretation of a plan provision. C) An accountant processes the "money out" for a participant account. D) A plan advisor is responsible for drafting annual safe harbor notices. A) Provides efficient contribution and distribution processes. - Answer- Which statement regarding bundled service arrangements is TRUE? A) Provides efficient contribution and distribution processes. B) Requires less fiduciary oversight than an unbundled service arrangement. C) Permits for specific single provider within the arrangement to be easily removed and replaced with another provider. D) Typical arrangement involves a TPA and an insurance company. A) Combining auto-enrollment with targeted education. - Answer- Based on behavioral finance research, which of the following is a best practice for producing successful participant outcomes? A) Combining auto-enrollment with targeted education. B) Adding a self-directed brokerage option. C) Re-enrolling all participants into equity investments. D) Offering group meetings that focus on participants' rational decision making. C) DEF has the right to "opt out" and be excluded from the related group. - Answer- Company ABC and Company DEF are determined to be part of a related group of companies. All the following are TRUE except: A) The employees of both ABC and DEF may end up participating in one plan. B) ABC may be required to make contributions for its employees into DEF's plan. C) DEF has the right to "opt out" and be excluded from the related group. D) If DEF adopts a plan, ABC employees may be eligible for the plan. A) Adding an employer matching contribution equal to 25% up to 12% of compensation deferred. - Answer- Which of the following plan designs may result in better participant deferral behavior? A) Adding an employer matching contribution equal to 25% up to 12% of compensation deferred. B) Adding a 3% nonelective safe harbor contribution. C