APT
sample questions
The following is a small selection of sample questions from
across the units.
Each either poses a question or makes a
statement which requires completion, and is followed by four possible responses
(lettered 'a', 'b', 'c' and 'd'), only ONE is correct.
Please note the Institute does not publish past papers or
sample question papers.
Unit 1: Law and Pensions Overview
In the examination there will be 20 questions on this unit. If the lifetime allowance exceeded, normally the consequences are that
a: action may be taken by the Pensions Regulator
against the Trustees
b: the excess, after appropriate taxation, may
provide additional pension or
lump sum
c: the excess, after appropriate taxation, must
be taken as additional pension
d: the excess must be used to provide benefits
for dependents
A simplified version of the trustee’s annual report
a: is not a requirement of the Disclosure
Regulations
b: must form part of the sponsoring employer’s
accounts
c: must be circulated to all current members
d: should be lodged with the Pensions Advisory
Service
The Pensions Regulator is able to compel schemes to take specified action to
remedy identified breaches of legislative requirements via
a: ‘improvement notices’
b: ‘requirement notices’
c: ‘variation notices’
d: ‘action declarations’
Unit 2: Core Investment and Funding Issues for Defined Contribution and
Defined Benefit Pensions
In the examination there will be 35 questions on this unit.
Passive investment management is where
a: trustees give complete direction to manager
b: trustees invest directly in markets
c: individual markets are tracked (i.e.,
index-tracking)
d: buying and selling actively takes place
For a pension scheme closed to new members, consisting solely of pensioners with
5% p.a. guaranteed increases attaching to their pensions, the most appropriate
type of investment would be
a: equities
b: fixed interest securities
c: index-linked gilts
d: property
Who is ultimately responsible for the scheme’s investment performance?
a: The investment managers
b: The actuary
c: The sponsoring employer
d: The trustees
Unit 3: Scheme Management Issues for Defined Contribution and Defined Benefit
Pensions In the examination there will be 35 questions on
this unit.
The main purpose of trustee meetings is to enable trustees to
a: comply with the law
b: monitor and direct scheme activities
c: discuss how the level of benefits may be
improved
d: consider the voting policy at the AGMs of the
companies in which they
invest
To comply with a pension sharing order, trustees must ensure that their scheme
a: earmarks part of the member’s benefit to
become payable to the ex-spose
on retirement
b: notifies the court of the costs payable
c: allocates the stipulated proportion of the
member’s transfer value to the ex-
spouse
d: allows the ex-spouse to become a contributory
member of the scheme
By law the Statement of Investment Principles
a: must be reviewed annually
b: must be reviewed at least every 3 years
c: must be reviewed at least every 5 years
d: can only be revised following a change in
investment policy
Unit 2: Core Investment Issues and Funding for Defined Contribution Pensions
In the examination there will be 20 questions on this unit.
Protected rights rebates paid into a contracted out money purchase scheme must
be invested
a: by the 19th of the month
b: by the end of the month in which they are
paid over to the trustees
c: in accordance with the member’s
instructions within one month of the
receipt by the scheme
d: within a timescale chosen by the trustees
In performance measurement, which is meant by “the median”?
a: The fund that has performed the same as FTSE
All Share Index
b: The fund that is the average of all those
measured
c: The fund that has out performed all of those
measured
d: The fund in the middle when all those
measured are listed in order
performance
Unit 3: Scheme Management Issues for Defined Contribution Pensions
In the examination there will be 20 questions on this unit.
For which of the following schemes is an actuarial valuation usually NOT
relevant?
a: Hybrid
b: Defined benefit
c: Final salary
d: Money purchase
The law requires that membership of an occupational pension scheme is
a: compulsory
b: voluntary
c: contributory
d: non-contributory
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