Segregated Funds & Annuities Mock Exam Questions and Correct Answers the Latest Update
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Course
Segregated funds
Institution
Segregated Funds
Group Registered Retirement Savings Plan (GRRSP)
GRRSPs offer investors a limited variety of investment choices, but they have lower
fees compared with individual RRSPs.
Cancellation of Segregated Fund Contract
An investor may cancel or rescind the segregated fund contract in writing within ...
Segregated Funds & Annuities Mock Exam
Questions and Correct Answers the
Latest Update
Group Registered Retirement Savings Plan (GRRSP)
✓ GRRSPs offer investors a limited variety of investment choices, but they have lower
fees compared with individual RRSPs.
Cancellation of Segregated Fund Contract
✓ An investor may cancel or rescind the segregated fund contract in writing within the
specific time limitation set by the insurer providing the contract. Two days is the
usual length of time permitted. The investor receives the lesser of the amount of
premium paid or value of fund units on that date if it is a valuation date. If it is not a
valuation date, then the value on the next valuation date applies.
Advanced Deferred Life Annuity (ADLA)
✓ A lifetime limit of 25% of the value of the qualifying plan, to a total of $150,000
applies to ALDA purchases. The ALDA has the ability to defer payments until the
end of the year in which the annuitant reaches 85. Therefore, the ALDA addresses
longevity risk and ensures that investors with an RRIF do not deplete their savings
prematurely during retirement.
Defined Contribution Pension Plan (DCPP)
✓ Because the money in the DCPP is locked in, it can only be transferred into another
locked-in account or left in the current DCPP.
✓
✓ A variable payment life annuity is an option for members of a DCPP.
✓ The minimum percentage of an RRIF account that must be withdrawn yearly starts at
age 65 and extends until age 95. The percentage range starts at 4% at age 65 and
goes to 20% at age 95. (4.7.2)
Group Savings Plans
✓ Groups that offer savings and investment plans to their members include employers,
associations, and fraternal organizations. Group plans are most often associated with
employers. The six fundamental types of group savings plans are:
✓ Defined benefit pension plan (DBPP)
✓ Defined contribution pension plan (DCPP)
✓ Group registered retirement savings plan (GRRSP)
✓ Deferred profit sharing plan (DPSP)
✓ Tax-free savings account (TFSA)
✓ Pooled registered pension plan (PRPP)
Deferred Profit Sharing Plan (DPSP)
✓ Deferred Profit Sharing Plan (DPSP) cannot be withdrawn with the Home Buyers
Plan (HBP), and a withdrawal from the DPSP would trigger income taxes.
Balanced Funds
✓ Balanced funds are also known as balanced growth or balanced income funds. A
balanced growth fund emphasizes stocks. A balanced income fund emphasizes bonds.
A balanced income fund would invest in more bonds than equities, providing mostly
income, but some growth. A balanced growth fund would primarily provide growth
with some income, while a small-cap fund would provide only growth and a money
market fund would provide minimal income and no growth.
Variable Payment Life Annuity (VPLA)
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