CPFA EXAM REVIEW QUESTIONS WITH
ACCURATE SOLUTIONS 2026
▶ Which statement regarding IRA plans and 401(k) plans is TRUE?
a. SIMPLE IRA plans are used to maximize plan benefits to owners.
b. SIMPLE IRAs and 401(k)s have the same plan document requirements.)
c. Participant loans are allowed from a SIMPLE 401(k) plan but not a
SIMPLE IRA.
d. An employer may sponsor a SIMPLE IRA and a profit-sharing plan
concurrently.. Answer: c. Participant loans are allowed from a SIMPLE
401(k) plan but not a SIMPLE IRA.
▶ A traditional 401(k) plan may be an appropriate choice for all of the
following employers, EXCEPT:
a. An employer who feels strongly that his or her employees should take an
active role in saving for retirement.
b. An employer whose first priority is to maximize his or her retirement
savings.
c. An employer who is paternalistic and wants to help employees save by
enacting automatic enrollment provisions.
d. An employer who wants to encourage employee participation with
matching contributions.. Answer: b. An employer whose first priority is to
maximize his or her retirement savings.
▶ An owner-driven plan sponsor wants to retire in five to ten years. His
company has a stable cash flow and ten employees. All of the following
plan designs are compatible with the owner's goals, EXCEPT:
a. 401(k) cross-tested safe harbor plan
,b. Defined benefit/defined contribution combination plan
c. 401(k) safe harbor plan
d. SIMPLE IRA. Answer: d. SIMPLE IRA
▶ A 401(k) plan has poor participation among the rank-and-file employees.
As a plan advisor, all of the following recommendations could boost plan
participation, EXCEPT:
a. Increasing the match amount from 25% to 50% of deferrals
b. Allowing participant loans
c. Adding a profit-sharing contribution based on years of service
d. Add and auto-enrollment feature to the plan. Answer: c. Adding a profit-
sharing contribution based on years of service
▶ An owner-driven plan sponsor wants to know the advantages of a safe
harbor 401(k) plan.
All of the following are advantages EXCEPT:
a. Safe harbor contributions can exempt the plan from the ADP test.
b. Safe harbor contributions may be taken as a hardship withdrawal.
c. Safe harbor contributions are discretionary.
d. Safe harbor contributions can satisfy top-heavy minimum contribution
requirements.. Answer: c. Safe harbor contributions are discretionary.
▶ All of the following plan features are typically located in the plan's
adoption agreement, EXCEPT:
a. Availability of participant loans
b. Availability of in-service withdrawals
c. Matching contribution formula
, d. Definition of ERISA fiduciary roles and responsibilities. Answer: d.
Definition of ERISA fiduciary roles and responsibilities
▶ All of the following are advantages of the request for proposal (RFP)
process in a participant-driven plan, EXCEPT:
a. The RFP allows the fiduciaries to delegate the selection of finalists to the
plan advisor and the TPA.
b. Plan advisor can assist the fiduciaries in compiling a list of potential
service providers.
c. Fiduciaries can make an "apples to apples" comparison of fees and
services.
d. The RFP and the responses can be part of the documentation that a
prudent process was followed.. Answer: a. The RFP allows the fiduciaries
to delegate the selection of finalists to the plan advisor and the TPA.
▶ All of the following service providers may assist with plan document
maintenance, EXCEPT:
a. ERISA attorney
b. Recordkeeper
c. TPA firm
d. Plan auditor. Answer: d. Plan auditor
▶ A safe harbor 401(k) plan with a cross-tested profit-sharing contribution
may be an appropriate choice for all of the following employers, EXCEPT:
a. An employer who has some years where there are no profits
b. A professional partnership with three partners and 50 employees
c. A dentist's office with one owner and five employees
d. A medical services company with 25 employees and two owners.
Answer: a. An employer who has some years where there are no profits
ACCURATE SOLUTIONS 2026
▶ Which statement regarding IRA plans and 401(k) plans is TRUE?
a. SIMPLE IRA plans are used to maximize plan benefits to owners.
b. SIMPLE IRAs and 401(k)s have the same plan document requirements.)
c. Participant loans are allowed from a SIMPLE 401(k) plan but not a
SIMPLE IRA.
d. An employer may sponsor a SIMPLE IRA and a profit-sharing plan
concurrently.. Answer: c. Participant loans are allowed from a SIMPLE
401(k) plan but not a SIMPLE IRA.
▶ A traditional 401(k) plan may be an appropriate choice for all of the
following employers, EXCEPT:
a. An employer who feels strongly that his or her employees should take an
active role in saving for retirement.
b. An employer whose first priority is to maximize his or her retirement
savings.
c. An employer who is paternalistic and wants to help employees save by
enacting automatic enrollment provisions.
d. An employer who wants to encourage employee participation with
matching contributions.. Answer: b. An employer whose first priority is to
maximize his or her retirement savings.
▶ An owner-driven plan sponsor wants to retire in five to ten years. His
company has a stable cash flow and ten employees. All of the following
plan designs are compatible with the owner's goals, EXCEPT:
a. 401(k) cross-tested safe harbor plan
,b. Defined benefit/defined contribution combination plan
c. 401(k) safe harbor plan
d. SIMPLE IRA. Answer: d. SIMPLE IRA
▶ A 401(k) plan has poor participation among the rank-and-file employees.
As a plan advisor, all of the following recommendations could boost plan
participation, EXCEPT:
a. Increasing the match amount from 25% to 50% of deferrals
b. Allowing participant loans
c. Adding a profit-sharing contribution based on years of service
d. Add and auto-enrollment feature to the plan. Answer: c. Adding a profit-
sharing contribution based on years of service
▶ An owner-driven plan sponsor wants to know the advantages of a safe
harbor 401(k) plan.
All of the following are advantages EXCEPT:
a. Safe harbor contributions can exempt the plan from the ADP test.
b. Safe harbor contributions may be taken as a hardship withdrawal.
c. Safe harbor contributions are discretionary.
d. Safe harbor contributions can satisfy top-heavy minimum contribution
requirements.. Answer: c. Safe harbor contributions are discretionary.
▶ All of the following plan features are typically located in the plan's
adoption agreement, EXCEPT:
a. Availability of participant loans
b. Availability of in-service withdrawals
c. Matching contribution formula
, d. Definition of ERISA fiduciary roles and responsibilities. Answer: d.
Definition of ERISA fiduciary roles and responsibilities
▶ All of the following are advantages of the request for proposal (RFP)
process in a participant-driven plan, EXCEPT:
a. The RFP allows the fiduciaries to delegate the selection of finalists to the
plan advisor and the TPA.
b. Plan advisor can assist the fiduciaries in compiling a list of potential
service providers.
c. Fiduciaries can make an "apples to apples" comparison of fees and
services.
d. The RFP and the responses can be part of the documentation that a
prudent process was followed.. Answer: a. The RFP allows the fiduciaries
to delegate the selection of finalists to the plan advisor and the TPA.
▶ All of the following service providers may assist with plan document
maintenance, EXCEPT:
a. ERISA attorney
b. Recordkeeper
c. TPA firm
d. Plan auditor. Answer: d. Plan auditor
▶ A safe harbor 401(k) plan with a cross-tested profit-sharing contribution
may be an appropriate choice for all of the following employers, EXCEPT:
a. An employer who has some years where there are no profits
b. A professional partnership with three partners and 50 employees
c. A dentist's office with one owner and five employees
d. A medical services company with 25 employees and two owners.
Answer: a. An employer who has some years where there are no profits
