CPC Consulting Skills & Client Advisory Flashcards
6 cards from real CPC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CPC Consulting Skills & Client Advisory flashcards as text
A CPC is advising a nonprofit organization on its retirement plan options. Which plan type is available exclusively to 501(c)(3) organizations and public schools?
Answer: 403(b) tax-sheltered annuity plan
IRC Section 403(b) plans are available exclusively to public schools and 501(c)(3) tax-exempt organizations, distinguishing them from 401(k) plans available to for-profit employers.
When a CPC advises a plan sponsor on a corrective amendment under the IRS Employee Plans Compliance Resolution System (EPCRS), which program allows self-correction of insignificant operational failures without IRS submission?
Answer: Self-Correction Program (SCP)
The Self-Correction Program (SCP) under EPCRS allows plan sponsors to self-correct insignificant operational failures at any time and significant failures within specific timeframes without filing with the IRS.
A plan sponsor wants to add auto-enrollment to their 401(k) plan. What initial default deferral rate does the SECURE 2.0 Act mandate for new automatic enrollment plans adopted after December 29, 2022?
Answer: 3% to 10% of compensation with annual 1% escalation
SECURE 2.0 requires new automatic enrollment plans to start at a minimum 3% deferral rate and automatically escalate by at least 1% per year until reaching at least 10% (but not more than 15%).
A plan consultant recommends implementing a Qualified Default Investment Alternative (QDIA). What protection does a QDIA provide plan fiduciaries?
Answer: It provides fiduciary relief for investment losses resulting from participant failure to direct investments, if DOL QDIA regulations are followed
DOL QDIA regulations provide fiduciary relief for investment losses incurred by participants who fail to direct their own investments, provided the plan satisfies all QDIA requirements including proper notice.
A client asks about the differences between a SIMPLE IRA and a SIMPLE 401(k). Which statement is correct?
Answer: SIMPLE IRAs are not subject to the nondiscrimination tests required for SIMPLE 401(k) plans, and SIMPLE 401(k)s must be in plan document form
SIMPLE 401(k) plans must be established via a plan document and satisfy ADP/ACP safe harbor rules, while SIMPLE IRAs are funded directly to employee IRAs and are exempt from most ERISA testing requirements.
When conducting a plan audit readiness review, which document is the CPC most critical to verify is current and properly adopted?
Answer: The plan's adoption agreement or restated plan document with all required amendments
An outdated or improperly adopted plan document is one of the most common audit findings; the plan must operate in conformance with its terms, which requires timely adoption of mandatory and discretionary amendments.