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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Please note we do not publish past papers.


If the lifetime allowance is 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: must be submitted to the pensions regulator

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’

Passive investment management is where

a: trustees give complete direction to the investment manager
b: trustees invest directly in markets
c: individual markets are tracked (i.e. index-tracking)
d: buying and selling rarely happens

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: investment consultant
c: the sponsoring employer
d: the trustees

For which of the following schemes is an actuarial valuation usually NOT relevant?

a: hybrid
b: defined benefit
c: final salary
d: money purchase

To comply with a pension sharing order, trustees must ensure that their scheme

a: meets the expenses of the divorce
b: notifies the court of the costs payable
c: allocates the stipulated proportion of the member’s fund value to the ex-spouse
d: allows the ex-spouse or civil partner 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