CPFA EXAM NEWEST ACTUAL EXAM
2025 QUESTIONS AND DETAILED
CORRECT ANSWERS | 100% CORRECT
ANSWERS
A traditional 401k plan maybe 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. Correct 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 Correct Answer D) SIMPLE IRA
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. Correct 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
Correct 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.
Correct 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 Correct Answer D) Plan auditor
All of the following describe the required participant
disclosure process, EXCEPT:
A) The Plan Administrator or Plan Sponsor can hire a
3(16) fiduciary to distribute required participant notices.
B) The party that distributes required notices to
participants is considered a fiduciary.
C) Generally, a TPA may prepare the safe harbor 401(k)
notice.
D) The Plan Administrator is responsible for the required
disclosures being distributed to the participants. Correct
Answer B) The party that distributes required notices to
participants is considered a fiduciary.
, All of the following are important factors when selecting a
service provider, EXCEPT:
A) Service provider's financial stability
B) Experience with plans of similar size and complexity
C) Willingness to provide revenue sharing to offset plan
fees
D) Qualifications of personnel that will service plan Correct
Answer C) Willingness to provide revenue sharing to offset
plan fees
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 Correct
Answer C) Adding a profit-sharing contribution based on
years of service
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) A 1,500 employee manufacturing firm
2025 QUESTIONS AND DETAILED
CORRECT ANSWERS | 100% CORRECT
ANSWERS
A traditional 401k plan maybe 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. Correct 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 Correct Answer D) SIMPLE IRA
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. Correct 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
Correct 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.
Correct 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 Correct Answer D) Plan auditor
All of the following describe the required participant
disclosure process, EXCEPT:
A) The Plan Administrator or Plan Sponsor can hire a
3(16) fiduciary to distribute required participant notices.
B) The party that distributes required notices to
participants is considered a fiduciary.
C) Generally, a TPA may prepare the safe harbor 401(k)
notice.
D) The Plan Administrator is responsible for the required
disclosures being distributed to the participants. Correct
Answer B) The party that distributes required notices to
participants is considered a fiduciary.
, All of the following are important factors when selecting a
service provider, EXCEPT:
A) Service provider's financial stability
B) Experience with plans of similar size and complexity
C) Willingness to provide revenue sharing to offset plan
fees
D) Qualifications of personnel that will service plan Correct
Answer C) Willingness to provide revenue sharing to offset
plan fees
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 Correct
Answer C) Adding a profit-sharing contribution based on
years of service
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) A 1,500 employee manufacturing firm
