CBP Retirement and Pension Plans 2

Question 1

Under ERISA, what is the fiduciary standard required of plan administrators?

Accepted Answer

Prudent expert standard acting solely in participant interests

Answer

Business judgment rule

Answer

Prudent investor rule applied solely to maximize returns

Answer

Reasonable care standard used in contract law

Question 2

Which type of retirement plan is most commonly associated with public school teachers and non-profit organization employees?

Accepted Answer

403(b)

Answer

401(k)

Answer

457(b)

Answer

SIMPLE IRA

Question 3

What is a Required Minimum Distribution (RMD) in the context of retirement plans?

Accepted Answer

The mandatory annual withdrawal from tax-deferred retirement accounts starting at age 73

Answer

The minimum employer match required by ERISA

Answer

The minimum benefit guaranteed by the PBGC

Answer

The minimum vesting schedule for DC plans

Question 4

In a cash balance plan, what represents the employee's accrued benefit?

Accepted Answer

Hypothetical account balance with pay credits and interest credits

Answer

Actual investment account balance

Answer

Final average salary multiplied by years of service

Answer

Employer's actuarial reserve

Question 5

Which non-discrimination test ensures that 401(k) employee deferral contributions do not disproportionately favor highly compensated employees?

Accepted Answer

ADP test

Answer

Top-heavy test

Answer

ACP test

Answer

Coverage test

Question 6

What is a 'safe harbor' 401(k) plan design intended to accomplish?

Accepted Answer

Automatically satisfy ADP/ACP non-discrimination tests

Answer

Eliminate the need for a plan document

Answer

Allow unlimited employer contributions

Answer

Provide PBGC insurance for defined contribution plans