Practice Test Geeks(CPC) Certified Pension Consultant Practice Test
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CPC Ethics & Professional Standards 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 Ethics & Professional Standards flashcards as text

  1. What is the significance of ERISA Section 3(21) in defining who is a plan fiduciary with ethical obligations?

    Answer: It identifies as fiduciaries anyone who exercises discretionary authority over plan management, assets, or administration, or who provides investment advice for a fee

    ERISA Section 3(21) defines a plan fiduciary as any person who exercises discretionary authority or control over plan management or assets, or who renders investment advice for a fee.

  2. A pension consultant who is a plan fiduciary recommends that the plan invest in a fund managed by the consultant's own firm. This is best described as:

    Answer: A potential prohibited transaction requiring a prohibited transaction exemption (PTE)

    Self-dealing by a fiduciary—using plan assets to benefit the fiduciary's own financial interests—is a prohibited transaction under ERISA Section 406(b) and requires an exemption.

  3. Under ERISA's duty of loyalty, a plan fiduciary must act:

    Answer: Solely in the interest of plan participants and beneficiaries

    ERISA's duty of loyalty requires fiduciaries to act solely in the interest of plan participants and beneficiaries, excluding consideration of employer or other party interests.

  4. A CPC is approached by a plan sponsor to help 'backdate' plan documents to qualify for a retroactive amendment. What should the CPC do?

    Answer: Refuse, as backdating documents constitutes fraud and is a serious ethical violation

    Backdating plan documents to misrepresent when plan provisions were adopted constitutes fraud and is an absolute ethical violation that no professional should facilitate.

  5. What is the 'prudent expert' standard under ERISA that governs fiduciary conduct?

    Answer: Fiduciaries must act with the care, skill, prudence, and diligence of a knowledgeable expert familiar with relevant matters

    ERISA's prudent expert standard requires fiduciaries to act with the care, skill, prudence, and diligence that a knowledgeable and prudent person familiar with such matters would use under similar circumstances.

  6. A pension consultant receives a subpoena for client plan records in a lawsuit involving the plan. What is the proper course of action?

    Answer: Notify the client immediately and provide the records only as required by law or court order after consulting with legal counsel

    Upon receiving a subpoena, the professional obligation is to promptly notify the client, allow the client to seek legal remedies (such as a motion to quash), and produce records only as legally required.