M3: Quizzes

Question 1

The ____ should provide guidelines for selecting, monitoring, measuring, and making decisions for a plan?s investments.

A. SPD
B. IPS
C. SMM
D. RFI

Answer 1

B. IPS

Study Guide, Pg. 10, Learning Outcome 2.4; Text, Pg. 77

Question 2

A document that contains a summary of the provisions of a plan is called a(n) ___________.

A. Supplemental Plan Description
B. Summary Plan Description
C. ERISA Plan Description
D. DOL Plan Description

Answer 2

B. Summary Plan Description

Study Guide, Pg. 8, Learning Outcome 1.6; Text, Pg. 72

Question 3

Subsequent to sending an initial SPD, an SPD reflecting plan changes must be distributed every years.

A. ten
B. six
C. five
D. three

Answer 3

C. five

Study Guide, Pg. 8, Learning Outcome 1.6; Text, Pg. 72

Question 4

All of the following are components of a well-constructed Investment Policy Statement (IPS), EXCEPT:

A. Statement of purpose
B. Asset allocation
C. Plan cost
D. Investment guidelines

Answer 4

C. Plan cost

Study Guide, Pg. 11, Learning Outcome 2.5; Text, Pg. 78

Question 5

It is recommended that ideally, investment committees meet _____________.

A. Annually
B. Monthly
C. Quarterly or semi-annually
D. Weekly

Answer 5

C. Quarterly or semi-annually

Study Guide, Pg. 13, Learning Outcome 2.9; Text, Pg. 80

Question 6

RFP stands for ______________________.

A. Repeat for Proposal
B. Request for Proposal
C. Request for Petition
D. Request for Program

Answer 6

B. Request for Proposal

Question 7

The factors that influence the shape and scope of an organization’s benefit communications include all the following, EXCEPT:

A. Highlights the value of employee benefits
B. Encourages better utilization of benefits
C. Satisfies legal requirements
D. Discourages open communication

Answer 7

D. Discourages open communication

Study Guide, Pg. 15, Learning Outcome 3.3; Text, Pg. 83-85

Question 8

There are ___________ significant differences between a market-driven approach to employee benefit plan communications and the traditional approach to such communications.

A. three
B. five
C. ten
D. six

Answer 8

B. five

Study Guide, Pg. 16, Learning Outcome 3.5; Text, Pg. 87

Question 9

When a plan closes, an SPD must be distributed by the _____ day of the relevant plan year to which the SPD applies.

A. 150th
B. 200th
C. 210th
D. 220th

Answer 9

C. 210th

Study Guide, Pg. 8, Learning Outcome 1.6; Text, Pg. 72

Question 10

A ________ Report is prepared by an auditor engaged by the third-party administrator to review and assess controls at that service organization. The service organization provides the report to any entity relying on its controls.

A. SOC 1
B. SOC 3
C. SOC 4
D. SOC 5

Answer 10

A. SOC 1

Study Guide, Pg. 20, Learning Outcome 4.6; Text, Pg. 94

Question 11

The plan sponsor and plan administrator are responsible for establishing and maintaining an effective system of controls.

Answer 11

TRUE

Question 12

Employee contributions to plans are not usually administered by payroll deductions.

Answer 12

FALSE

Question 13

The Summary Plan Description (SPD) contains a summary of the provisions of the plan.

Answer 13

TRUE

Question 14

The investment committee should be very large in order to be more effective.

Answer 14

FALSE

Question 15

The total compensation statement offers a realistic view of what an employee’s total pay and benefits are really worth.

Answer 15

TRUE

Question 16

For retirement plans with more than 100 participants, funds must be submitted as soon as possible, but not more than 20 days into the month following the month in which they are withheld from payroll.

Answer 16

FALSE

(15 days)

Question 17

The IPS is the foundation for how the plan investment program is expected to operate.

Answer 17

TRUE

Question 18

An investment committee should meet annually at a minimum.

Answer 18

TRUE

Question 19

Good plan internal controls can shorten the turnaround time on requests for additional information.

Answer 19

TRUE

Question 20

Plans that are subject to ERISA do not have to be established and maintained pursuant to a written plan document.

Answer 20

FALSE

Question 21

Plans that are subject to ERISA must be established and maintained in a _________ form.

A. Oral
B. Partially oral, partially written
C. Written
D. Legal

Answer 21

C. Written

Text, pg 70

Question 22

The document that contains a summary of the provisions of the plan, including details about the eligibility, benefits, plan operations, funding, and claims procedures as well as a statement of ERISA rights is known as the _________.

A. SBC
B. SPD
C. IPS
D. SMM

Answer 22

B. SPD

Text, pg 76

Question 23

Which communication approach for employee benefits focuses on informing or explaining the benefits?

A. Market-driven approach
B. Traditional approach
C. Direct approach
D. Indirect approach

Answer 23

B. Traditional approach

Text, pg 87

Question 24

The document that is the foundation for how a retirement plan investment program is expected to operate is the ________.

A. IPS
B. IRS
C. DOL
D. SPD

Answer 24

A. IPS

Text, pg 77

Question 25

At a minimum, an investment committee should meet ________. A. Biannually B. Monthly C. Quarterly D. Annually

Answer 25

D. Annually Text, pg 80

Question 26

A ________ is responsible for establishing and maintaining an effective system of internal controls over employee benefit plans. A. IPS committee B. Plan sponsor C. Plan sponsor and plan administrator D. Plan administrator

Answer 26

C. Plan sponsor and plan administrator Text, pg 90

Question 27

What is a common problem encountered by auditors regarding the allocation of funds in plans to employee accounts? A. Funds are not always remitted in a timely manner. B. Funds are always remitted in a timely manner. C. Funds are insufficient. D. Funds are remitted in 10 days.

Answer 27

A. Funds are not always remitted in a timely manner. Text, pg 92

Question 28

What is the communication tone in a market-driven approach? A. Affects changing attitudes or behaviors B. Neutral C. Specific D. Direct

Answer 28

D. Direct Text, pg 87

Question 29

It is recommended that a plan sponsor issue a record keeper Request for Proposal (RFP) within _______. A. Five to ten years B. Three to five years C. One to three years D. Four to six years

Answer 29

B. Three to five years Text, pg 80

Question 30

An initial SPD must be distributed to participants and beneficiaries within days. A. 30 days B. 90 days C. 120 days D. 210 days

Answer 30

C. 120 days Text, pg 72

Question 31

1. All of the following are ERISA reporting and disclosure requirements, EXCEPT: A. A summary plan description B. A summary of material modification C. A biannual financial report (Form 5500) D. A written plan document

Answer 31

Answer: C Study Guide: Module 3, Pg. 6, Learning Outcome 1.2 Text, Pg. 69

Question 32

2. The SPD must be distributed by the _________day following the close of the relevant plan year to which the SPD applies, unless there is a material reduction in benefits. A. 215th B. 220th C. 210th D. 365th

Answer 32

Answer: C Study Guide, Module 3, Pg. 8, Learning Outcome 1.6 Text, Pg. 72