CPFA License Exam Certified Plan Fiduciary Actual
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Correct Detailed Answers| Brand New Version!
A 3(21) fiduciary advisors can recommend investments but the final decision on
which investments to choose is up to the
plan fiduciaries.
A 3(16) plan administrator can take on administrative duties for the plan but
does not act in
an investment capacity.
A non-fiduciary advisors can provide
education
The DOL is not required to be notified if
the plan hires a 3(21) advisor.
The fiduciaries should do a review of the service provider qualifications in
order to prove a
prudent process was not followed when selecting the service provider. They
should also review the service agreement, document the decision process, and
have a service
agreement with the 3(21) advisor.
,A 3(21) advisor fiduciary is considered a
fiduciary to the plan, but different than advisors working as 3(38) fiduciaries, it
is rarely named in the plan document.
The service agreement between the plan sponsor and the TPA is what determines
if
a TPA will work as a 3(16) fiduciary Plan Administrator.
ERISA 3(16) fiduciaries serve as the
"Plan Administrator" and are responsible for administrative responsibilities in the
plan.
These include assuring the plan operation remains in compliance with the plan
document, providing administrative and compliance documents for the
fiduciary file and assuring that employee notices are drafted and distributed.
ERISA 3(21) and 3(38) fiduciaries serve as
investment fiduciaries and their main duty under ERISA is to provide investment
advice.
3(38) fiduciaries may also serve as the
named investment manager for the plan, and unlike 3(21) investment advice
fiduciaries, will have discretionary control over plan investments.
Employee education through enrollment meetings is performed by
retirement plan advisors, including non-fiduciary, 3(21), and 3(38) fiduciary
advisors. Assisting with fiduciary file documentation is another function that all
retirement plan advisors, both fiduciary and non-fiduciary are likely to
perform.
,As the advisor, you can assist the plan sponsor by
by asking about documents he or she may be missing from the
fiduciary file. For example:
Are there any plan amendments?
Does he or she have copies of the required participant notices (including
participant fee disclosure) and account statements?
Where are the 408(b)(2) fee disclosure notices?
Does he or she have evidence that looked at the fee disclosure to determine if
plan fees are reasonable?
You can also assist the plan sponsor in identifying the
plan service providers who may have copies of these documents, and assist him
in setting up a fiduciary file.
You may also want to show the sponsor a
sample DOL investigation letter, so he is aware of what the DOL might ask in
advance of an investigation. You can point out that unsigned documents or
amendments and/or
missing and incomplete plan documentation may put him at risk in an audit.
You should assure the that Plan Sponsor is aware of
both your role as an investment fiduciary regulations and what documentation
she may need to review based on specific financial institution requirements.
The advisor or the CPA is not responsible for
the required plan amendments. The TPA or ERISA counsel can prepare the
required amendment.
, The plan docs need to be amended when
there is a law change that impacts the plan, or when the fiduciaries are
changing the plan provisions.
It is the fiduciaries' responsibility to
distribute fee disclosures notices, the record keeper is the one who prepares
them.
The plan document, IPS, and SPD are only required to be updated if
changes have been made by the plan fiduciaries or law changes require a plan
amendment and changes to the SPD.
Fiduciaries have personal liability for
a "breach" of their duties.
It is important to remind the fiduciaries that an investment involving a party in
interest is prohibited even if
it has been beneficial to the plan participants and beneficiaries. The prohibited
transaction still must be corrected.
Correcting prohibited transactions may or may not be done through
the DOL Voluntary Fiduciary Corrections Program (VFCP). Regardless, it is not the
advisor's role to correct prohibited transactions. Fiduciaries should consult an
ERISA attorney to identified prohibited transactions and assist in correcting the
transactions. Transactions should be corrected as soon as possible to avoid
additional taxation.
Exam Newest With Complete Questions And
Correct Detailed Answers| Brand New Version!
A 3(21) fiduciary advisors can recommend investments but the final decision on
which investments to choose is up to the
plan fiduciaries.
A 3(16) plan administrator can take on administrative duties for the plan but
does not act in
an investment capacity.
A non-fiduciary advisors can provide
education
The DOL is not required to be notified if
the plan hires a 3(21) advisor.
The fiduciaries should do a review of the service provider qualifications in
order to prove a
prudent process was not followed when selecting the service provider. They
should also review the service agreement, document the decision process, and
have a service
agreement with the 3(21) advisor.
,A 3(21) advisor fiduciary is considered a
fiduciary to the plan, but different than advisors working as 3(38) fiduciaries, it
is rarely named in the plan document.
The service agreement between the plan sponsor and the TPA is what determines
if
a TPA will work as a 3(16) fiduciary Plan Administrator.
ERISA 3(16) fiduciaries serve as the
"Plan Administrator" and are responsible for administrative responsibilities in the
plan.
These include assuring the plan operation remains in compliance with the plan
document, providing administrative and compliance documents for the
fiduciary file and assuring that employee notices are drafted and distributed.
ERISA 3(21) and 3(38) fiduciaries serve as
investment fiduciaries and their main duty under ERISA is to provide investment
advice.
3(38) fiduciaries may also serve as the
named investment manager for the plan, and unlike 3(21) investment advice
fiduciaries, will have discretionary control over plan investments.
Employee education through enrollment meetings is performed by
retirement plan advisors, including non-fiduciary, 3(21), and 3(38) fiduciary
advisors. Assisting with fiduciary file documentation is another function that all
retirement plan advisors, both fiduciary and non-fiduciary are likely to
perform.
,As the advisor, you can assist the plan sponsor by
by asking about documents he or she may be missing from the
fiduciary file. For example:
Are there any plan amendments?
Does he or she have copies of the required participant notices (including
participant fee disclosure) and account statements?
Where are the 408(b)(2) fee disclosure notices?
Does he or she have evidence that looked at the fee disclosure to determine if
plan fees are reasonable?
You can also assist the plan sponsor in identifying the
plan service providers who may have copies of these documents, and assist him
in setting up a fiduciary file.
You may also want to show the sponsor a
sample DOL investigation letter, so he is aware of what the DOL might ask in
advance of an investigation. You can point out that unsigned documents or
amendments and/or
missing and incomplete plan documentation may put him at risk in an audit.
You should assure the that Plan Sponsor is aware of
both your role as an investment fiduciary regulations and what documentation
she may need to review based on specific financial institution requirements.
The advisor or the CPA is not responsible for
the required plan amendments. The TPA or ERISA counsel can prepare the
required amendment.
, The plan docs need to be amended when
there is a law change that impacts the plan, or when the fiduciaries are
changing the plan provisions.
It is the fiduciaries' responsibility to
distribute fee disclosures notices, the record keeper is the one who prepares
them.
The plan document, IPS, and SPD are only required to be updated if
changes have been made by the plan fiduciaries or law changes require a plan
amendment and changes to the SPD.
Fiduciaries have personal liability for
a "breach" of their duties.
It is important to remind the fiduciaries that an investment involving a party in
interest is prohibited even if
it has been beneficial to the plan participants and beneficiaries. The prohibited
transaction still must be corrected.
Correcting prohibited transactions may or may not be done through
the DOL Voluntary Fiduciary Corrections Program (VFCP). Regardless, it is not the
advisor's role to correct prohibited transactions. Fiduciaries should consult an
ERISA attorney to identified prohibited transactions and assist in correcting the
transactions. Transactions should be corrected as soon as possible to avoid
additional taxation.
