M8: Quizzes Flashcards
For the portion of retirement income that is generated from investment assets, the IRS requires individuals to take a RMD if the individual is not working and is retired. The distribution beings at age ____ in 2023.
A. 72
B. 73
C. 75
D. 70.5
B. 73
Text, page 290; Study materials update, April 2023, pages 3,4, and 19
A ______ allows individuals to defer a certain portion of income up to age 85.
A. QLCA
B. QALC
C. QCLA
D. QLAC
D. QLAC
Text, pg 291
The ________ increased the age that retirees were forced to withdraw a certain percentage of their assets from retirement accounts.
A. The Dodd-Frank Act
B. The Investment Company Act of 1940
C. ERISA Section 404
D. SECURE and SECURE 2.0 Acts
D. SECURE and SECURE 2.0 Acts
Text, pg 300; Study materials update, April 2023, pgs 3,4, 19
Funds that are legally classified as “open-end investment companies” are subject to regulation under the Investment Company Act of 1940 and are known as _________.
A. Bonds
B. Private funds
C. Stocks
D. Mutual funds
D. Mutual funds
Text, pg 317
Section _______ requires all plans to have at least one “named fiduciary”
A. 402
B. 403(b)
C. 401(a)
D. 403
A. 402
Text, pg 316
Often called a ______ arrangement, this involves the rendering of investment advice for a fee or other compensation.
A. 3(20)
B. 3(21)
C. 3(30)
D. 3(38)
B. 3(21)
Text, pg 316
IS THIS CORRECT?
_______ funds typically seek to match an index of securities, meaning the fund will usually align fairly closely with the return of the index.
A. Passive
B. Active
C. White label
D. Aggressive
A. Passive
Text, pg 318
______ funds are only offered to benefit plans and are not subject to the same disclosure requirements as mutual funds.
A. Collective Investment
B. Hedge
C. Private equity
D. Green label
A. Collective Investment
Text, pg 321
SECURE 2.0 expands the RMD exemption for QLAC funds by eliminating the requirement the premium can’t exceed 25% of the individual’s IRA balance and increasing the QLAC dollar limit to ______ (indexed to cost of living beginning in 2024).
A. $150,000
B. $175,000
C. $200,000
D. $125,000
C. $200,000
Study Materials Update - April 2023 pg 20
In an effort to reduce expenses, fiduciaries of participant-directed plans may use a separate account that invests directly in stocks, bonds, or other types of individual securities and these are known as _______ funds.
A. Hedge
B. White label
C. Private
D. Green label
B. White label
Text, page 326
The _____ research project supported a retirement income menu design with at least 3 income generator options.
A. SOA/SCL
B. SCL/SSA
C. SOS/SCL
D. SOL/SCL
A. SOA/SCL
Study Guide, page 5, learning objective 1/5; text pg 292
What type of plan provides retirement income to individuals of an older age?
A. Life annuity
B. QLAC
C. Income generator
D. Life benefit
B. QLAC
Study guide, page 11, learning objective 2.1; text pg 296
The maximum age at commencement of a QLAC is currently set at the age of ____.
A. 75
B. 80
C. 85
D. 77
C. 85
Study guide, page 12, learning objective 2.4(b); text, pg 297-298
Collective investment trusts are offered only to _____ plans.
A. Retirement
B. Savings
C. Medical
D. Benefit
D. Benefit
Study guide, page 24, learning objective 6.5(a); text, pg 320-322
______ investments generally encompass private investments including hedge funds and other private vehicles.
A. Stable
B. Alternative
C. Annuity
D. Income generator
B. Alternative
Study guide, page 27, learning objective 6.10; text pgs 328-331
_______ funds generally do not redeem their shares.
A. Open-end
B. Closed-end
C. Alternative
D. Annuity
B. Closed-end
Study guide, page 23, learning objective 6.3; text pg 320
______ funds are separate accounts that invest directly in stocks, bonds, or other types of individual securities in lieu of a pooled fund.
A. Green label
B. Black label
C. White label
D. Red label
C. White label
Study guide, pg 26, learning objective 6.8; text, pg 326-327
______ funds are classified as open-end investment companies.
A. Stock
B. Annuity
C. Mutual
D. ETF
C. Mutual
Study guide, pg 23, learning objective 6.3; text, pg 320
Typical retirement income goals include all of the following, EXCEPT:
A. A desire for liquidity to meet emergencies
B. Maximizing expected retirement
C. Income that does not decrease due to capital market volatility
D. Income that does not keep up with inflation
D. Income that does not keep up with inflation
Study guide pg 8, learning objective 1.3; text pg 289
The ______ responded to fiduciaries’ past concerns that they could be held responsible for an insurer’s solvency if they selected an annuity provider.
A. Dodd-Frank Act
B. QDIA Act
C. SECURE Act
D. Sulyma Intel Act
C. SECURE Act
Study guide pg 14, learning objective 3.3; text, pg 30
There is no maximum age to begin payments under a QLAC.
A. True
B. False
B. False
Section 404 of ERISA sought to install longstanding principles of fiduciary conduct that had been developed under the common law of trusts with the specific intent of protecting participants in employee benefit plans.
A. True
B. False
A. True
Closed-end funds generally redeem their shares.
A. True
B. False
B. False
Per SECURE 2.0, the total premium of a QLAC cannot exceed $200,000 (indexed to the cost of living beginning in 2024).
A. True
B. False
A. True
The “prudent man” standard requires investments to be made with skil, prudence, and diligence.
A. True
B. False
A. True
An investment policy statement (IPS) is expressly required under ERISA.
A. True
B. False
B. False
Prudent investing is not judged on the investment results in hindsight, but rather by the process employed to investigate and monitor the investment.
A. True
B. False
A. True
Hiring an investment advisor or investment manager relieves the named fiduciary from understanding the nature of the plan’s investments and chosen investment strategies.
A. True
B. False
B. False
Passive funds typically seek to match an index of securities, while active funds attempt to outperform the market.
A. True
B. False
A. True
Green label funds are separate accounts that invest directly in stocks, bonds, or other types of individual securities in lieu of a pooled fund.
True or False
False
White label
A type of investment that provides retirement income to individuals starting at an advanced age is known as a:
A. RIG
B. QLAC
C. DC plan with lifetime income options
D. SOA/SCL
E. Annuity
B. QLAC
Study Guide, Module 8, Page 11, Learning Objective 2.1
Text, Page 296
Mutual funds are often used as an investment vehicle in ERISA plans. All of the following are true regarding mutual funds, EXCEPT:
A. Mutual funds are not subject to direct regulation by ERISA
B. Mutual funds are not subject to regulation under the Investment Company Act of 1940
C. Mutual funds issue redeemable shares
D. Mutual funds are required to provide appropriate disclosure documents
B Mutual funds are not subject to regulation under the Investment Company Act of 1940
Study Guide, Module 8, Page 22, Learning Objective 6.1
Text, Pages 317-318
