1
CPFA License
Exam- (Certified
Plan Fiduciary
Advisor) (Online
Practice Questions)
What are the 4 basic fiduciary standards under the Fiduciary
Standard of Care? (Section 404)
1.) Loyalty - (Exclusive purpose rule - Providing benefits to
participants and their beneficiaries; and defraying reasonable
expenses of administering the plan)
2.) Prudence - (Act with prudence by investigating before
making any plan decisions, documenting the decision-making
, 2
process, hiring experts when they don't possess the knowledge
or skills to make a decision, and monitoring if their decisions
are still ideal based on the exclusive purpose rule and taking
action if not
3.) Diversification - (Diversify investment in a prudent manner
in order to minimize risk; Investment factors may include
purpose of plan, amount of assets, investment acumen of the
participants and participant demographics
4.) Following the plan's governing documents - (Follow plan
documents to the extent that they are not contrary to ERISA
rules)
How many fiduciaries does a retirement plan?
All retirement plans have one or more fiduciaries
Plan fiduciaries have a legal obligation to operate the plan on
behalf of ...? (Primary rule of ERISA)
Plan participants and their beneficiaries, and not on behalf of
owners, the employer, or key employees
Who will almost always be a fiduciary to the plan?
1.) Plan Sponsor
2.) Plan Trustee
3.) Plan Administrator
Which of these statements about personal liability is true?
*All fiduciaries have personal liability
CPFA License
Exam- (Certified
Plan Fiduciary
Advisor) (Online
Practice Questions)
What are the 4 basic fiduciary standards under the Fiduciary
Standard of Care? (Section 404)
1.) Loyalty - (Exclusive purpose rule - Providing benefits to
participants and their beneficiaries; and defraying reasonable
expenses of administering the plan)
2.) Prudence - (Act with prudence by investigating before
making any plan decisions, documenting the decision-making
, 2
process, hiring experts when they don't possess the knowledge
or skills to make a decision, and monitoring if their decisions
are still ideal based on the exclusive purpose rule and taking
action if not
3.) Diversification - (Diversify investment in a prudent manner
in order to minimize risk; Investment factors may include
purpose of plan, amount of assets, investment acumen of the
participants and participant demographics
4.) Following the plan's governing documents - (Follow plan
documents to the extent that they are not contrary to ERISA
rules)
How many fiduciaries does a retirement plan?
All retirement plans have one or more fiduciaries
Plan fiduciaries have a legal obligation to operate the plan on
behalf of ...? (Primary rule of ERISA)
Plan participants and their beneficiaries, and not on behalf of
owners, the employer, or key employees
Who will almost always be a fiduciary to the plan?
1.) Plan Sponsor
2.) Plan Trustee
3.) Plan Administrator
Which of these statements about personal liability is true?
*All fiduciaries have personal liability
