CEBS - RPA 2 EXAM Questions and Answers
1. Premature distributions from IRAs exempt from penalty if:- ANSWER -Distribution
occurred b/c of IRS levy on account to pay taxes.
2. IRA qualified distributions include:- ANSWER -Attained age 59 1/2; disabled; died and payment
made to beneficiary or estate; pay first-time home buyer expenses, not to exceed $10k.
3. Term used to describe condition that occurs b/c of different accrual patterns
when traditional DB plan converted to cash balance plan:- ANSWER -Pension
wear away
4. Section 409A- ANSWER -IRC mandate that income from deferred comp arrangements not be deferred
beyond year in which comp is earned.
5. Qualified retirement plans required to have fidelity bond covering what %?-
ANSWER --
10%
6. Dollar cost averaging- ANSWER -Involves investing the same amount of money on periodic basis,
whether over- or under-priced.
7. Vesting provisions of executive retirement arrangements:- ANSWER -varies
depending on intent of executive arrangement
8. Excess contribution to IRA subject to nondeductible excise tax of:- ANSWER -
6%
9. Nonworking spouse may establish IRA using what types of payment as basis
for eligibility?- ANSWER -Earned income of working spouse
10. Fiduciary liable for duly appointed and monitored investment mgr if perfor-
mance of plan below benchmark?- ANSWER -Not liable since investment mgmt svcs delegated
11. Typical range for % of earnings credited under % of earnings per year
formula?- ANSWER -1% to 1.25%
12. Tax treatment of NQSO (NQ stock options) for ER:- ANSWER -ER gets corporate income tax
deduction for amount of comp income EE realizes at exercise of option.
13. Penalty for failure to make required distribution of at least correct amount
from qualified retirement plan:- ANSWER -Nondeductible excise tax of 50%
14. EEs w/drawing contributions from SIMPLE IRA during initial two-year period,
subject to penalty of:- ANSWER -25%
15. When qualified plan hold ER securities, max amount for fidelity bond is:-
ANSWER -In- creased by a significant amount
1/
15
, CEBS - RPA 2 EXAM Questions and Answers
16. Taxable amount received before 59 1/2 from qualified plan subject to addi-
tional penalty of:- ANSWER -10%
2/
15
1. Premature distributions from IRAs exempt from penalty if:- ANSWER -Distribution
occurred b/c of IRS levy on account to pay taxes.
2. IRA qualified distributions include:- ANSWER -Attained age 59 1/2; disabled; died and payment
made to beneficiary or estate; pay first-time home buyer expenses, not to exceed $10k.
3. Term used to describe condition that occurs b/c of different accrual patterns
when traditional DB plan converted to cash balance plan:- ANSWER -Pension
wear away
4. Section 409A- ANSWER -IRC mandate that income from deferred comp arrangements not be deferred
beyond year in which comp is earned.
5. Qualified retirement plans required to have fidelity bond covering what %?-
ANSWER --
10%
6. Dollar cost averaging- ANSWER -Involves investing the same amount of money on periodic basis,
whether over- or under-priced.
7. Vesting provisions of executive retirement arrangements:- ANSWER -varies
depending on intent of executive arrangement
8. Excess contribution to IRA subject to nondeductible excise tax of:- ANSWER -
6%
9. Nonworking spouse may establish IRA using what types of payment as basis
for eligibility?- ANSWER -Earned income of working spouse
10. Fiduciary liable for duly appointed and monitored investment mgr if perfor-
mance of plan below benchmark?- ANSWER -Not liable since investment mgmt svcs delegated
11. Typical range for % of earnings credited under % of earnings per year
formula?- ANSWER -1% to 1.25%
12. Tax treatment of NQSO (NQ stock options) for ER:- ANSWER -ER gets corporate income tax
deduction for amount of comp income EE realizes at exercise of option.
13. Penalty for failure to make required distribution of at least correct amount
from qualified retirement plan:- ANSWER -Nondeductible excise tax of 50%
14. EEs w/drawing contributions from SIMPLE IRA during initial two-year period,
subject to penalty of:- ANSWER -25%
15. When qualified plan hold ER securities, max amount for fidelity bond is:-
ANSWER -In- creased by a significant amount
1/
15
, CEBS - RPA 2 EXAM Questions and Answers
16. Taxable amount received before 59 1/2 from qualified plan subject to addi-
tional penalty of:- ANSWER -10%
2/
15
