CTFA Retirement and Employee Benefits Planning 2

Question 1

A charitable remainder unitrust (CRUT) differs from a charitable remainder annuity trust (CRAT) in which key way?

Accepted Answer

A CRUT pays a fixed percentage of annually revalued assets; a CRAT pays a fixed dollar amount

Answer

A CRUT distributes a fixed percentage of trust assets revalued each year, so payments fluctuate with asset values, while a CRAT pays a fixed annuity amount each year.

Question 2

Under the minimum distribution rules, what is the penalty for failing to take a required minimum distribution from an IRA?

Accepted Answer

25% excise tax on the amount that should have been distributed (reduced to 10% if corrected timely)

Answer

SECURE 2.0 reduced the RMD failure penalty from 50% to 25% of the missed RMD amount, further reduced to 10% if the error is corrected within the correction window.

Question 3

Which type of pension plan guarantees a specific monthly benefit at retirement regardless of investment performance?

Accepted Answer

Defined benefit (DB) plan

Answer

A defined benefit plan promises a specified monthly benefit at retirement, typically based on salary and years of service, with the employer bearing investment risk.

Question 4

What is a qualified domestic relations order (QDRO) used for in retirement planning?

Accepted Answer

To assign retirement plan benefits to a former spouse or dependent as part of a divorce settlement

Answer

A QDRO is a court order that assigns a portion of a qualified retirement plan to an alternate payee (former spouse or dependent) pursuant to a divorce decree.

Question 5

Under the spousal rollover rules, a surviving spouse who inherits an IRA may do which of the following that other beneficiaries cannot?

Accepted Answer

Roll the inherited IRA into their own IRA and delay RMDs until they reach age 73

Answer

A surviving spouse can roll an inherited IRA into their own IRA, delaying RMDs until they themselves reach the required beginning date age.

CTFA - Certified Trust and Fiduciary Advisor Practice Test

CTFA - Certified Trust and Fiduciary Advisor Practice Test

CTFA Retirement and Employee Benefits Planning 2