CPC CPC Ethics & Professional Standards

Question 1

Which professional organization publishes the Code of Professional Conduct that governs enrolled actuaries working on pension plans?

Accepted Answer

The American Academy of Actuaries (AAA)

Answer

The Society of Actuaries (SOA)

Answer

The American Society of Pension Professionals & Actuaries (ASPPA)

Answer

The Joint Board for the Enrollment of Actuaries (JBEA)

Question 2

An enrolled actuary signs a Schedule SB for a plan with a known material actuarial error. What is the correct professional response?

Accepted Answer

Refuse to sign and advise the plan administrator of the error

Answer

Sign the form and disclose the error in a footnote

Answer

Correct the error and file an amended return without notifying the IRS

Answer

Sign the form because the plan administrator is ultimately responsible

Question 3

A CPC who discovers that a plan sponsor has engaged in a prohibited transaction should do what?

Accepted Answer

Advise the plan sponsor of the violation and recommend corrective action, including VCP or VFCP filing

Answer

Ignore it if the amount is below $10,000

Answer

Report it immediately and directly to the DOL without informing the client

Answer

Continue advising as normal since the CPC is not a fiduciary

Question 4

Under ASPPA's Code of Professional Conduct, what obligation does a CPC have when providing written advice?

Accepted Answer

Written advice must be balanced, state material assumptions, and identify significant limitations

Answer

Written advice is optional; verbal advice is always sufficient

Answer

Written advice requires a disclaimer that it is not legal advice

Answer

Written advice must be reviewed by an attorney before delivery

Question 5

A pension consultant receives a referral fee from an investment firm for recommending the firm's collective investment trusts. Under DOL guidance, what must the consultant do?

Accepted Answer

Disclose the fee arrangement to plan fiduciaries and ensure the arrangement is reasonable

Answer

Keep the fee confidential to avoid conflicts of interest

Answer

Return the fee within 30 days

Answer

File Form 5500 Schedule C disclosing the fee

Question 6

What is the primary purpose of ASPPA's CPE (continuing professional education) requirements for CPC credential holders?

Accepted Answer

To ensure credential holders maintain current knowledge of laws, regulations, and best practices relevant to their work

Answer

To increase ASPPA membership revenue

Answer

To qualify CPCs for promotion to senior actuarial roles

Answer

To satisfy IRS enrolled actuary CE requirements only