CRPC Social Security and Pensions 4

Question 1

Under Social Security, what percentage of a worker's PIA can a spouse receive if the spouse claims at their own full retirement age?

Accepted Answer

50%

Answer

A spouse who claims at full retirement age receives up to 50% of the worker's PIA as a spousal benefit.

Question 2

A defined benefit pension plan is described as 'top-heavy.' What minimum vesting schedule must the plan satisfy?

Accepted Answer

3-year cliff or 6-year graded

Answer

Top-heavy plans must use accelerated vesting: 3-year cliff or 2-6 year graded vesting under IRC Section 416.

Question 3

Which Social Security taxable wage base concept is most relevant when calculating a worker's Primary Insurance Amount (PIA)?

Accepted Answer

Average Indexed Monthly Earnings (AIME)

Answer

The PIA is calculated by applying bend-point percentages to the worker's AIME, which indexes historical earnings to current wage levels.

Question 4

A pension plan terminates and is underfunded. Which federal agency insures participants' vested benefits up to a statutory maximum?

Accepted Answer

Pension Benefit Guaranty Corporation (PBGC)

Answer

The PBGC insures defined benefit pension plan benefits up to annual statutory limits when an underfunded plan terminates.

Question 5

A 72-year-old retired worker who is still receiving Social Security benefits remarries. How does remarriage affect their retirement benefits?

Accepted Answer

Retirement benefits are unaffected by remarriage

Answer

A worker's own Social Security retirement benefit is not affected by remarriage at any age.

CRPC - Chartered Retirement Planning Counselor Practice Test