Midterm Quiz

Question 1

A summary plan description (SPD) must be furnished _____ to participants.

A. Within 200 days
B. Whenever the company wants to
C. Automatically
D. At no set time

Answer 1

C. Automatically

Study Guide, Module 1, Learning Outcome 2.2(b);Text, Page 15

Question 2

ERISA stipulates that records be maintained for at least ____ years from the date the plan’s associated Form 5500 is filed.

A. Two
B. Six
C. Five
D. Seven

Answer 2

B. Six

Module 1 - Candidate Note: Sutdy Guide, Page 19

Question 3

Health and accident insurance plan payment benefits received by an employee, the employee’s spouse, and eligible covered dependents ______ taxable income to the employee so long as they are used for the employee’s medical care.

A. Are
B. Are not
C. May be
D. May not be

Answer 3

B. Are not

Study Guide, Module 2, Pg 7, Learning Outcome 1.3; Text, Page 30

Question 4

All large, insured employers (an employer with at least _____ full-time employees, including full-time equivalent employees) must report whether they offer group health insurance.

A. 60
B. 100
C. 30
D. 50

Answer 4

D. 50

Study guide, Module 2, Page 13, Learning Outcome 3.3; Text, Page 35

Question 5

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

A. ISP
B. IPS
C. PSI
D. IL

Answer 5

B. IPS

Study Guide, Module 3, Page 10, Learning Outcome 2.4; Text, Page 77

Question 6

Success is often hard to measure in the ______ approach, while it is directly measurable in the _____ approach.

A. Market-driven/traditional
B. Passive/active
C. Traditional/market-driven
D. Active/passive

Answer 6

C. Traditional/market-driven

Study Guide, Module 3, Page 16, Learning Outcome 3.5; Text, Page 87

Question 7

Plan sponsors assume ______ privacy risks when providing sensitive personal data of participants to service providers for plan administration.

A. Lesser
B. No
C. Some
D. Greater

Answer 7

D. Greater

Study Guide, Module 4, Page 7, Learning Outcome; Text, Page 118

Question 8

ASC topic _____ includes the accounting and financial reporting standards for defined contribution plans.

A. 961
B. 965
C. 962
D. 960

Answer 8

C. 962

Study Guide, Module 5, Page 7, Learning Outcome 1.2; Text, Page 181

Question 9

A plan administrator _____ have the right to examine an auditor’s work papers for any purpose, including assessing audit quality.

A. Does not
B. May
C. May not
D. Does

Answer 9

A. Does not

Study Guide, Module 5, Page 12, Learning Outcome 2.9; Text, Page 193

Question 10

_____ are the most popular default investment in the post-PPA world.

A. Bonds
B. Stocks
C. TDFs
D. Mutual Funds

Answer 10

C. TDFs

Study Guide, Module 6, Page 18, Learning Outcome 4.2; Text, Page 244

Question 11

All of the following are types of benefits provided by ERISA health and welfare plans, EXCEPT:

A. Apprenticeship or training benefits
B. Prepaid legal services and vacation benefits
C. Scholarship funds
D. Defined contribution and defined benefit plans

Answer 11

D. Defined contribution and defined benefit plans

Study Guide, Module 1, Page 7, Learning Outcome 1.5; Text, Page 10

Question 12

Voluntary benefit arrangements that are exempt from ERISA based on the DOL safe harbor must meet certain requirements. All of the following are requirements to be exempt, EXCEPT:

A. Participation is completely involuntary
B. No employer consideration except for reasonable compensation for administration
C. No employer endorsement
D. No employer or employee organization contributions

Answer 12

A. Participation is completely involuntary

Study Guide, Module 1, Page 8, Learning Outcome 1.7; Text, Page 12

(Participation is completely VOLUNTARY)

Question 13

Requirements that must be met for employer contributions to be exempted from FICA and FUTA Taxation include all of the following, EXCEPT:

A. The employer is required to make the contributions
B. The employer can document that the employees contribute to the plan
C. The plan is not referred to in an employment contract
D. The plan is in writing

Answer 13

C. The plan is not referred to in an employment contract

Study Guide, Module 2, Page 7, Learning Outcome 1.4; Text, Page 31

Question 14

All of the following are coverage types and arrangements that do not need to be reported on Form W-2, EXCEPT:

A. Medical savings accounts
B. Health savings account
C. Coverage for a specified disease or other indemnity insurance if premiums are paid for by the employee on a pre-tax basis
D. Wellness programs unless COBRA beneficiaries pay premiums

Answer 14

C. Coverage for a specified disease or other indemnity insurance if premiums are paid for by the employee on a pre-tax basis

Study Guide, Module 2, Page 12, Learning Outcome 3.2; Text, Page 34-35

Question 15

The investment committee charter is an important component of plan governance and should perform all of the following, EXCEPT:

A. Define how committee members are selected or appointment
B. Specify activities for which the committee is not responsible for
C. Define the roles of any outside consultants
D. Establish how often regular committee meetings should occur

Answer 15

B. Specify activities for which the committee is not responsible for

Study Guide, Module 3, Page 10, Learning Outcome 2.3; Text, Page 76

Question 16

All of the following are factors that influence the shape and scope of an organization’s benefit communications program, EXCEPT:

A. Encourage less utilization of benefits
B. Support and facilitate benefits administration
C. Satisfy legal requirements
D. Highlight the value of employee benefits

Answer 16

A. Encourage less utilization of benefits

Study Guide, Module 3, Page 15, Learning Outcome 3.3; Text, Page 83-85

Question 17

Common cyberthreats in the environment where benefit plans operate include all of the following, EXCEPT:

A. Wire transfer email fraud
B. Malware via internal devices
C. Phishing
D. Ransomware

Answer 17

B. Malware via internal devices

Study Guide, Module 4, Page 8, Learning Outcome 2.1; Text, Page 133

(it is Malware via external devices)

Question 18

During the due diligence process of the selection of service providers, the focus should be on all of the following main subject areas, EXCEPT:

A. The track record of the service provider
B. How the service provider will use organizational information
C. Where the personal information will be stored and processed
D. What reporting the service provider supplies

Answer 18

B. How the service provider will use organizational information

Study Guide, Module 4, Page 15, Learning Outcome 4.2; Text, Page 123-124

Question 19

There are deficiencies and weakness that plan auditors commonly communicate to management. These include all of the following, EXCEPT:

A. Outside service providers
B. Internal plan processes
C. Non-regulatory requirements
D. Regulatory requirements

Answer 19

C. Non-regulatory requirements

Study Guide, Module 5, Page 19, Learning Outcome 4.5; Text, Page 206

Question 20

Popular default options for defined contribution plans after the Pension Protection Act include Target Date Funds (TDFs). All of the following are characteristics of TDF funds, EXCEPT:

A. They are the most popular default investment
B. They seek higher returns
C. They take less risk
D. As workers get older, risk gradually decreases

Answer 20

C. They take less risk

Study Guide, Module 6, Page 18, Learning Outcome 4.2; Text, Page 244

Question 21

The main disclosure requirements under ERISA for welfare plans include:

I. A plan document must exist
II. Copies of certain plan documents must be furnished to participants upon an oral request
III. Claim procedures must be established
IV. A summary of material modifications must be furnished upon request

A. I only
B. I, II, IV
C. I, III
D. I, II, III, IV

Answer 21

C. I, III

Study Guide, Module 1, Page 11, Learning Outcome 2.2; Text page 15

II-Copies required upon WRITTEN request; IV-SMM furnished AUTOMATICALLY

Question 22

Which of the following are true about the summary annual report (SAR), which is considered a plan disclosure requirement under ERISA?
I. A SAR is a summary of certain information in a plan’s Form 5500 Annual Report
II. ERISA requires that a SAR be given to each participant
III. A SAR has to be provided if the plan is a totally funded plan
IV. Notification must be given to participants under ERISA to receive additional information

A. II only
B. I, III
C. I, IV
D. I, II, IV

Answer 22

D. I, II, IV

Study Guide, Module 1, Page 19, Learning Outcome 4.2; Text, Page 33-34

(does NOT have to be provided if totally UNfunded & paid from ER assets)

Question 23

Which of the following are characteristics of an HRA?

I. The HRA only reimburses medical care expenses, defined by the IRC
II. The HRA does not reimburse medical expenses for a prior tax year
III. THe HRA does not reimburse expenses incurred before the HRA plan became effective or expenses incurred before the employee enrolled in the plan
IV. HRAs are fully funded by the employer

A. I only
B. III only
C. I, II, III, IV
D. I, II, IV

Answer 23

C. I, II, III, IV

Study Guide, Module 2, Page 14, Learning Outcome 4.1; Text, Page 39

Question 24

Sick pay is usually provided by employers so that employees do not lose wages. Sick pay is subject to which of the following taxes?

I. FIT
II. FUTA
III. FICA
IV. SUTA

A. II only
B. II and III
C. I and IV
D. I, II, III

Answer 24

D. I, II, III

Study Guide, Module 2, Page 17, Learning Outcome 5.1; Text, Page 43

Question 25

Many areas have been identified as especially in need of internal controls. Some of them are: I. Compensation and personal data II. Distributions and loans III. Hardship withdrawals IV. Contributions A. I only B. I, III, IV C. I, II, III, and IV D. III and IV

Answer 25

C. I, II, III, and IV Study Guide, Module 3, Page 20, Learning Outcome 4.5; Text, Page 92-94

Question 26

Which of the following were terms of the GMR settlement? I. GMR and its owners are prohibited from misrepresenting the extent to which they maintain the privacy and security of consumers' personal information II. They must establish a comprehensive information security program that will protect consumers' sensitive personal information III. The company must have their program evaluated both initially and every five years by a certified party IV. The settlement will remain in force for the next 25 years A. I only B. II only C. I and II D. I, II, III, and IV

Answer 26

C. I and II Study Guide, Module 4, Page 12, Learning Outcome 3.5; Text, Page 122 | (III-every 2 years; IV-next 20 years)

Question 27

When a plan fiduciary is selecting and contracting with service providers, they should: I. Establish due diligence standards for vetting and tiering II. Consider whether the service provider has a cybersecurity program III. Conduct periodic risk assessments IV. Define security obligations A. II and III B. I, II, and III C. I, III, and IV D. I, II, III, and IV

Answer 27

D. I, II, III, and IV Study Guide, Module 4, Page 14, Learning Outcome 4.1; Text, Page 122-125

Question 28

Some of the more common deficiencies involved with internal plan processes include: I. Implementation of proper controls associated with the reconciliation process between participant elections, payroll witholdings and amounts deposited II. Participant loan repayments III. Hardship withdrawals IV. Problems with systems that are in place between plan sponsor's payroll system and the plan administrator's system A. I only B. II only C. II and III D. I, II, III, and IV

Answer 28

D. I, II, III, and IV Study Guide, Module 5, Page 19, Learning Outcome 4.6; Text, Page 206

Question 29

The goal of the Statement of Auditing Standards No. 136 is: I.To improve the quality of audits of ERISA plans Il. To operationalize and achieve the quality goal by prescribing certain procedures that are required to be performed in the audit III. To add complexity and opacity to the nature and scope of ERISA benefit plan audits to better protect member privacy IV. To clarify each party's role and responsibility throughout the audit process A. I and II B. III and IV C. I, II, IV D. I, III, IV

Answer 29

C. I, II, IV Study Guide, Module 5, Page 21, Learning Outcome 5.1; Text, Page 209-211

Question 30

General requirements for the maintenance of electronic records by plan administrators include: I. Being able to convert the records to legible paper form Il. Imposing total access restrictions (e.g., time or location) III. Being adequately secured, organized, backed up, and maintained by established procedures IV. Being able to index, retain, preserve, retrieve, and reproduce the records in a safe and accessible place A. Ill only B. Il and III C. Il and IV D. I, III, IV

Answer 30

D. I, III, IV Study Guide, Module 6, Page 16, Learning Outcome 3.5; Text, Page 238-239