CRPC Social Security and Pensions 2

Question 1

A widow age 60 wants to claim survivor benefits. How does early claiming affect her benefit compared to claiming at her full retirement age?

Accepted Answer

Benefit is reduced to 71.5% of the deceased spouse's PIA

Answer

A widow claiming survivor benefits at age 60 receives 71.5% of the deceased worker's PIA due to early claiming.

Question 2

Under a defined benefit pension plan, which integration method credits the Social Security covered compensation level when calculating benefits?

Accepted Answer

Step-rate integration

Answer

Step-rate (excess) integration provides a higher accrual rate on earnings above the Social Security covered compensation level.

Question 3

An employee has 30 years of substantial earnings under Social Security. How does this affect the Windfall Elimination Provision (WEP)?

Accepted Answer

WEP is fully eliminated after 30 years of substantial earnings

Answer

Workers with 30 or more years of substantial Social Security earnings are completely exempt from the WEP reduction.

Question 4

Which Social Security benefit rule allows a divorced spouse to claim on an ex-spouse's record without affecting the ex-spouse's own benefit?

Accepted Answer

Independent entitlement rule

Answer

Under independent entitlement, a divorced spouse's claim on an ex-spouse's record does not reduce or affect the ex-spouse's benefits.

Question 5

A pension plan uses a 5-year cliff vesting schedule. An employee leaves after 4 years and 11 months. What is their vested percentage?

Accepted Answer

0% vested

Answer

Under cliff vesting, an employee must complete the full required years (5) to be vested; leaving before that date results in 0% vesting.

CRPC - Chartered Retirement Planning Counselor Practice Test