Practice Test Geeks(CPC) Certified Pension Consultant Practice Test
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Fiduciary Responsibility & Compliance Standards Flashcards

7 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 7 Fiduciary Responsibility & Compliance Standards flashcards as text

  1. Under ERISA Section 3(38), an 'investment manager' must be all of the following EXCEPT:

    Answer: A licensed broker-dealer registered with FINRA

    ERISA Section 3(38) defines an investment manager as an RIA, bank, or insurance company that acknowledges fiduciary status in writing; broker-dealer registration alone does not qualify.

  2. The 'named fiduciary' requirement under ERISA Section 402(a) serves what primary purpose?

    Answer: To identify at least one person with authority to control and manage plan operations, ensuring accountability

    ERISA requires every plan to have a named fiduciary so participants and the DOL can identify who is responsible for plan management and operations.

  3. Which of the following is NOT a fiduciary duty under ERISA's Section 404 standards?

    Answer: Maximizing investment returns regardless of risk

    ERISA requires prudence and diversification, not return maximization—fiduciaries must balance risk and return, not simply chase the highest returns.

  4. A plan administrator fails to provide a participant with a requested Summary Plan Description within the ERISA-mandated timeframe. The maximum civil penalty per day is:

    Answer: $110

    The DOL can assess a civil penalty of up to $110 per day (periodically adjusted for inflation) for failing to provide required documents to participants upon request.

  5. The concept of 'settlor functions' is important in fiduciary analysis because:

    Answer: Decisions about plan design and establishment are generally not fiduciary acts

    Courts and the DOL distinguish between settlor functions (plan design, amendment, termination) which are business decisions, and fiduciary functions (plan administration) which trigger ERISA duties.

  6. Under the DOL's investment advice fiduciary rule, a financial professional giving rollover recommendations is subject to fiduciary standards when the recommendation:

    Answer: Is part of a regular business relationship and is individualized to the investor

    The DOL's fiduciary rule applies when advice is provided as part of a regular business relationship, is individualized, and the adviser receives compensation directly or indirectly.

  7. ERISA Section 412 requires that every fiduciary of an employee benefit plan be bonded. The bond amount must be at least:

    Answer: 10% of the amount of funds handled, up to $500,000 ($1,000,000 for plans holding employer securities)

    ERISA Section 412 requires a fidelity bond of at least 10% of plan assets handled (minimum $1,000), with a cap of $500,000 or $1,000,000 for plans with employer securities.