Practice Test GeeksCRPC - Chartered Retirement Planning Counselor Practice Test
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Employer-Sponsored Retirement Plans Flashcards

7 cards from real CRPC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. What is the required beginning date for required minimum distributions (RMDs) for most participants in employer-sponsored plans under SECURE 2.0?

    Answer: April 1 following the year the participant turns 73

    Under SECURE 2.0 (effective 2023), the RMD starting age increased to 73, with distributions due by April 1 of the following year.

  2. A company establishes an ESOP (Employee Stock Ownership Plan). Which of the following best describes how an ESOP works?

    Answer: The plan trust borrows money to purchase employer stock and allocates shares to employee accounts

    A leveraged ESOP borrows money to buy employer stock, repays the loan with employer contributions, and allocates shares to participants over time.

  3. Under the 'still working' exception to RMDs, a participant in a 401(k) who continues working past age 73 can defer RMDs from their current employer's plan. Which group does NOT qualify for this exception?

    Answer: 5% owners of the sponsoring employer

    5% owners must begin RMDs at age 73 regardless of employment status and cannot use the still-working exception.

  4. Which of the following retirement plans is NOT subject to ERISA's fiduciary standards?

    Answer: Governmental 457(b) plan for a state university

    Governmental plans are exempt from ERISA, so a state university's 457(b) plan is not subject to ERISA fiduciary rules.

  5. A Qualified Domestic Relations Order (QDRO) allows a divorcing spouse to receive a share of a participant's retirement plan benefits. Which type of plan is NOT subject to a QDRO?

    Answer: IRA

    QDROs apply to ERISA-governed qualified plans; IRAs are divided using a transfer incident to divorce, not a QDRO.

  6. What does 'annual additions' include when testing against the Section 415 limit for defined contribution plans?

    Answer: Employee deferrals, employer contributions, and after-tax employee contributions

    Annual additions include all employee elective deferrals, employer contributions, and after-tax employee contributions made in a plan year.

  7. A participant in a 401(k) plan at age 45 takes an early withdrawal of $20,000. Assuming no exception applies, what is the total tax impact?

    Answer: Ordinary income tax on $20,000 plus a 10% early withdrawal penalty

    Early withdrawals from a 401(k) before age 59½ are subject to ordinary income tax plus a 10% early withdrawal penalty unless an exception applies.