M8:

Question 1

What a defined benefit plan provides

Answer 1

Specified amount of benefits at retirement

Question 2

1. Systematic withdrawal program from invested assets in a plan
2. Guaranteed lifetime annuities
3. Temporary payout from plan assets to delay taking Social Security benefits

Answer 2

Retirement Income Generator (RIG) options

Question 3

This agency reported that most older workers don’t have access to retirement income solutions in their 401(k) plans.

Answer 3

Government Accounting Office (GAO)

Question 4

They provide retirement income to individuals starting at an advanced age.

Answer 4

Qualified Longevity Annuity Contracts (QLACs)

Question 5

A challenge for older workers trying to generate lifetime retirement

Answer 5

Retirement savings may have to last 20-30 years

Question 6

A rule requiring participants start taking annual distributions from their retirement accounts at age 73 in 2023, age 75 in 2033

Answer 6

Required Minimum Distributions (RMDs)

Question 7

DC plans
Traditional IRA’s
403(b)
Governmental 457(b)

Answer 7

Type of plans eligible for QLACs

Question 8

The maximum age at the beginning of a QLAC

Answer 8

Age 85

Question 9

The maximum premium for a QLAC

Answer 9

Under SECURE 2.0, $200,000 (indexed to cost of living in 2024)

Question 10

Investments to be made with skill, prudence, and diligence

Answer 10

Prudent man theory

Question 11

This theory constructs a risk/return frontier that assumes diversification always eliminates non-systematic risk.

Answer 11

Modern Portfolio Theory (MPT)

Question 12

Rendering of investment advice for a fee or other compensation

Answer 12

A 3(21) arrangement

Question 13

Entity that has the authority to make investment decisions

Answer 13

A 3(38) arrangement

Question 14

A type of fund that seeks to match an index of securities

Answer 14

Passive investment funds

Question 15

A type of funds that may outperform the market

Answer 15

Active investment funds

Question 16

Pooled investment funds offered by a bank

Answer 16

Collective investment trusts

Question 17

How do closed-ended funds redeem their shares?

Answer 17

Closed-ended funds typically do not redeem their shares.

Question 18

Separate accounts that invest directly in stocks, bonds or other types of individual security in lieu of a pooled fund

Answer 18

White label funds

Question 19

Generally encompasses private equity or venture capital, hedge funds, managed futures, art and antiques, commodities, and derivatives contracts and often real estate.

Answer 19

Alternate investments

Question 20

What type of shares do mutual funds issue?

Answer 20

Mutual funds issue redeemable shares.

Question 21

The regulation that primarily addresses the provision of services between a plan and a party in interest, ensuring that such arrangements are reasonable and necessary for the operation of the plan and that no more than reasonable compensation is paid for the services.

Answer 21

Section 2550.408b-2