CPFA LATEST EXAM PREP QUESTIONS
AND ANSWERS PDF 2026
▶ Based on behavioral finance research, which of the following is a best
practice for producing successful participant outcomes?
a. Combining auto-enrollment with targeted education.
b. Adding a self-directed brokerage option.
c. Re-enrolling all participants into equity investments.
d. Offering group meetings that focus on participants' rational decision
making.. Answer: a. Combining auto-enrollment with targeted education.
▶ Company ABC and Company DEF are determined to be part of a related
group of companies. All the following statements are TRUE, EXCEPT:
a. The employees of both ABC and DEF may end up participating in one
plan.
b. ABC may be required to make contributions for its employees into DEF's
plan.
c. DEF has the right to "opt out" and be excluded from the related group.
d. If DEF adopts a plan, ABC employees may be eligible for the plan..
Answer: c. DEF has the right to "opt out" and be excluded from the related
group.
▶ Which of the following plan designs may result in better participant
deferral behavior?
a. Adding an employer matching contribution equal to 25% up to 12% of
compensation deferred
b. Adding a 3% nonelective safe harbor contribution
,c. Adding a 1,000 hours of service requirement to receive the employer
matching contribution
d. Adding a profit-sharing contribution. Answer: a. Adding an employer
matching contribution equal to 25% up to 12% of compensation deferred
▶ An advisor is meeting with a Plan Sponsor to discuss contribution design
in her plan.
All of the following questions will help with this conversation, EXCEPT:
a. Is there a goal that employees should be required to contribute to
receive an employer contribution?
b. Can participants convert their existing contribution accounts to Roth
accounts?
c. Is there a group of employees who are unlikely to participate in the plan?
d. How important is it that employees are on track for adequate retirement
income?. Answer: b. Can participants convert their existing contribution
accounts to Roth accounts?
▶ -Jake is a sole proprietor and has just established a software
development company.
-He has recently hired two employees.
-Currently, the company does not have a good cash flow, but if Jake can
hire more software
engineers, growth and profits should increase.
Based on the information above, all of the following are questions that an
advisor should ask when establishing a plan for Jake's company, EXCEPT:
a. Can the company's current cash flow support employer contributions?
b. Does the company have an established line of credit?
c. What are Jake's objectives for attracting future employees?
d. Is Jake willing to make a fixed contribution if it enables him to save
more?. Answer: b. Does the company have an established line of credit?
▶ A partnership is a business that:
, a. Cannot have a limited liability structure.
b. Has at least two partners.
c. Is typically run by a board of directors.
d. Reports income on Form 1120.. Answer: b. Has at least two partners.
▶ All of the following describe the impact of a business's cash flow and
budget when establishing a plan, EXCEPT:
a. A plan advisor should inform the employer that required contributions will
be waived for any year that the company does not make a profit.
b. A plan advisor should explain a plan's contribution commitment to the
employer.
c. Employers should have a stable cash flow if they are considering
adopting a Defined Benefit/Defined Contribution combination plan.
d. A plan advisor may work with the service provider to show estimates of
what employer contributions would be under different contribution
formulas.. Answer: a. A plan advisor should inform the employer that
required contributions will be waived for any year that the company does
not make a profit.
▶ Which of the following reports can be used in measuring plan
effectiveness and participant outcomes?
a. Number of terminated participants who elected to roll their accounts into
IRAs
b. Average deferral rate of participants in the plan
c. Independent accountant's required annual audit of the plan
d. Summary Annual Report. Answer: b. Average deferral rate of
participants in the plan
▶ All of the following are benefits of participant retirement readiness,
EXCEPT:
AND ANSWERS PDF 2026
▶ Based on behavioral finance research, which of the following is a best
practice for producing successful participant outcomes?
a. Combining auto-enrollment with targeted education.
b. Adding a self-directed brokerage option.
c. Re-enrolling all participants into equity investments.
d. Offering group meetings that focus on participants' rational decision
making.. Answer: a. Combining auto-enrollment with targeted education.
▶ Company ABC and Company DEF are determined to be part of a related
group of companies. All the following statements are TRUE, EXCEPT:
a. The employees of both ABC and DEF may end up participating in one
plan.
b. ABC may be required to make contributions for its employees into DEF's
plan.
c. DEF has the right to "opt out" and be excluded from the related group.
d. If DEF adopts a plan, ABC employees may be eligible for the plan..
Answer: c. DEF has the right to "opt out" and be excluded from the related
group.
▶ Which of the following plan designs may result in better participant
deferral behavior?
a. Adding an employer matching contribution equal to 25% up to 12% of
compensation deferred
b. Adding a 3% nonelective safe harbor contribution
,c. Adding a 1,000 hours of service requirement to receive the employer
matching contribution
d. Adding a profit-sharing contribution. Answer: a. Adding an employer
matching contribution equal to 25% up to 12% of compensation deferred
▶ An advisor is meeting with a Plan Sponsor to discuss contribution design
in her plan.
All of the following questions will help with this conversation, EXCEPT:
a. Is there a goal that employees should be required to contribute to
receive an employer contribution?
b. Can participants convert their existing contribution accounts to Roth
accounts?
c. Is there a group of employees who are unlikely to participate in the plan?
d. How important is it that employees are on track for adequate retirement
income?. Answer: b. Can participants convert their existing contribution
accounts to Roth accounts?
▶ -Jake is a sole proprietor and has just established a software
development company.
-He has recently hired two employees.
-Currently, the company does not have a good cash flow, but if Jake can
hire more software
engineers, growth and profits should increase.
Based on the information above, all of the following are questions that an
advisor should ask when establishing a plan for Jake's company, EXCEPT:
a. Can the company's current cash flow support employer contributions?
b. Does the company have an established line of credit?
c. What are Jake's objectives for attracting future employees?
d. Is Jake willing to make a fixed contribution if it enables him to save
more?. Answer: b. Does the company have an established line of credit?
▶ A partnership is a business that:
, a. Cannot have a limited liability structure.
b. Has at least two partners.
c. Is typically run by a board of directors.
d. Reports income on Form 1120.. Answer: b. Has at least two partners.
▶ All of the following describe the impact of a business's cash flow and
budget when establishing a plan, EXCEPT:
a. A plan advisor should inform the employer that required contributions will
be waived for any year that the company does not make a profit.
b. A plan advisor should explain a plan's contribution commitment to the
employer.
c. Employers should have a stable cash flow if they are considering
adopting a Defined Benefit/Defined Contribution combination plan.
d. A plan advisor may work with the service provider to show estimates of
what employer contributions would be under different contribution
formulas.. Answer: a. A plan advisor should inform the employer that
required contributions will be waived for any year that the company does
not make a profit.
▶ Which of the following reports can be used in measuring plan
effectiveness and participant outcomes?
a. Number of terminated participants who elected to roll their accounts into
IRAs
b. Average deferral rate of participants in the plan
c. Independent accountant's required annual audit of the plan
d. Summary Annual Report. Answer: b. Average deferral rate of
participants in the plan
▶ All of the following are benefits of participant retirement readiness,
EXCEPT:
