Practice Test GeeksCRPC - Chartered Retirement Planning Counselor Practice Test
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Social Security and Pensions 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.

Read the first 7 Social Security and Pensions flashcards as text

  1. A client's defined benefit pension uses a unit-credit formula of 1.5% × years of service × final average salary. With 25 years of service and a $80,000 final average salary, what is the annual pension benefit?

    Answer: $30,000

    1.5% × 25 × $80,000 = $30,000 annual benefit.

  2. Under Social Security, what is the maximum family benefit (MFB) expressed as a percentage range of the worker's PIA?

    Answer: 150% to 188%

    The maximum family benefit ranges from approximately 150% to 188% of the worker's PIA depending on the PIA bend points.

  3. Which pension distribution option provides the highest monthly payment but ceases entirely upon the retiree's death?

    Answer: Life annuity (straight life)

    A straight life annuity pays the maximum monthly amount but provides no survivor benefit after the retiree's death.

  4. A 63-year-old client with a non-covered state pension wants to claim Social Security spousal benefits. The GPO will offset the spousal benefit by what fraction of the pension amount?

    Answer: Two-thirds

    The Government Pension Offset reduces Social Security spousal benefits by two-thirds of the non-covered government pension.

  5. Under ERISA's minimum participation standards, an employee must generally be allowed to participate in a pension plan when they reach what age and complete what service requirement?

    Answer: 21 years old with 1 year of service

    ERISA's general minimum participation standard requires plans to cover employees who are at least 21 and have completed 1 year of service.

  6. What is the Social Security 'break-even' analysis used to determine in retirement planning?

    Answer: The age at which cumulative lifetime benefits from delayed claiming equal those from early claiming

    Break-even analysis identifies the age at which total lifetime benefits from a later start date surpass total benefits from an earlier start date.

  7. A pension plan amendment significantly reduces the future benefit accrual rate for existing participants. Under ERISA, what protection applies to benefits already accrued?

    Answer: Accrued benefits are protected and cannot be reduced or eliminated by plan amendment

    ERISA's anti-cutback rule (Section 204(g)) prohibits any plan amendment that reduces or eliminates benefits already accrued by participants.