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Sample questions

The following is a small selection of sample questions from across the syllabus.  The examination paper will contain 90 questions in total and must be completed in 90 minutes.

Questions 1 - 8 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.

On the examination paper the first 55 questions will be of this type. 

Questions 9 – 14 are known as multiple true false questions. They comprise two statements (numbered (i) and (ii) and four possible options (lettered 'a' both true; 'b' Only (i) true; 'c' Only (ii) true; and 'd' both false), again only ONE of these options is correct.

On the examination paper the final 35 questions will be of this type.

It’s recommended that candidates spend 45 minutes on each type of question. 

Each correct answer will score 1 mark.  Negative marking is not used and no marks are deducted for incorrect responses.

Questions

1. In a DC workplace pension scheme, the member

a. must always contribute

b. cannot predict the final level of benefit in advance

c. will always be worse off than he would have been in a defined benefit arrangement

d. must always take his benefits at State Pension Age.

 

2. The Pensions Regulator advises that its DC Code of Practice (No. 13) should be read in conjunction with a number of other Codes - including which one of the following Codes?

a. Notifiable Events (No. 2).

b. Early Leavers (No. 4).

c. Reporting late payment of contributions to personal pension schemes (No. 6.).

d. Circumstances in relation to the material detriment test (No. 12.).

 

3. What is the role of an Independent Governance Committee?

a. To appoint professional advisers to the scheme.

b. To produce annual communications for the scheme.

c. To monitor and report on whether the scheme and provider is delivering value for money.

d. To challenge employers on contribution levels.

 

4. Which of the following is NOT part of the model process for ‘value for money’ assessment?

a. Collecting information on total benefits of scheme membership and total costs of scheme membership.

b. Submitting reports on value for money to the Financial Conduct Authority.

c. Determining criteria for assessing value for money.

d. Comparing criteria against other schemes.

 

5. A trust-based workplace pension scheme’s Internal Dispute Resolution Procedure (IDRP) must ensure that decisions are reached and notified to applicants within a reasonable period. For a one stage IDRP, the Pensions Regulator considers a reasonable period to be?

a. Twelve months from the date of the event giving rise to the complaint.

b. Thirty working days after the last piece of information is received.

c. Four months from the date an application is made.

d. Six months as there must be at least two stages in an IDRP.

 

6. Which of the following statements best describes a lifestyle strategy?.

a. An investment strategy with a growth and a consolidation phase where funds are automatically switched during the latter phase into lower risk investments on a gradual basis.

b. A high risk investment strategy that seeks to outperform the markets.

c. An investment strategy allowing full flexibility over investment switching.

d. A self-select strategy typically employed by those who are actively engaged in investment matters.

 

7. What is the maximum amount that a scheme could pay as a trivial commutation lump sum death benefit after 6 April 2015?

a. £0.

b. £10,000.

c. £18,000.

d. £30,000.

 

8. (i) The concept of flexi-access drawdown was introduced by the Finance Act 2014.

(ii) Flexi-access drawdown funds may be paid in connection with pension commencement lump sums.

a. Both True

b. Only (i) True

c. Only (ii) True

d. Both False

 

9. The Pensions Act 2014 makes provision for exemptions for automatic enrolment for

(i) those who have tax protection

(ii) former employees who have been paid a winding up lump sum in the previous 12 months and are subsequently re-employed by the same employer.

a. Both True

b. Only (i) True

c. Only (ii) True

d. Both False

 

10. (i) For 2015/16 the automatic enrolment annual earnings trigger is £10,000.

(ii) If a scheme is to be used for the purposes of automatic enrolment, the minimum employer contribution rate from 2017 will be 8% of qualifying earnings.

a. Both True

b. Only (i) True

c. Only (ii) True

d. Both False

 

11. The DC Annual Allowance will be triggered for payments

(i) where a member has an existing flexible drawdown fund as at 5 April 2015

(ii) in the case of a serious ill-health lump sum.

a. Both True

b. Only (i) True

c. Only (ii) True

d. Both False

 

12. Under the quality standards

(i) a Chair must produce a statement to include in the annual report and accounts setting out scheme performance against the quality standards

(ii) workplace DC schemes have to have a governing body with a duty to act in member’s interests.

a. Both True

b. Only (i) True

c. Only (ii) True

d. Both False