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Sample questions

The following is a small selection of sample examination questions. We do not publish past papers or model examination papers. Examination papers comprise two types of questions.

Each of the first kind 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.

The second kind 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.

Questions

1. Which one of the following has the power to fine employers for failing to provide pension provision in accordance with the automatic enrolment legislation?

a. The Financial Conduct Authority.
b. The Financial Ombudsman Service.
c. The Pensions Ombudsman.
d. The Pensions Regulator.

2.The Retail Distribution Review rules came into force from:

a.  6th April 2012
b.  1st October 2012
c.  31st December 2012
d.  6th April 2013.

3. Which one of the following is prohibited from becoming a trustee of an occupational pension scheme?

a.  The scheme actuary.
b.  The scheme's legal adviser.
c.  A scheme member.
d.  The Managing Director of the sponsoring employer.

4. The Lifetime Allowance:

a.  is set by HM Revenue and Customs
b.  is determined by using a rate of 25:1 for valuing pensions in payment
c.  was £1.8 million for the 2013/14 tax year
d.  does not apply to self invested personal pension plans.

5. The State Second Pension was designed to replace:

a. stakeholder pensions
b. the Basic State Pension
c. the State Earnings Related Pension Scheme
d. personal pensions

6. Which one of the following normally attracts tax relief in relation to a registered pension scheme?

a. Pensions payable in retirement
b. Refunds of pension contributions
c. Pensions payable on disability
d. Member contributions

7. The Reference Scheme Test is:

a. the current method for contracting out for final salary occupational pension schemes
b. an industry test for the best value personal pensions
c. the Government standard for stakeholder pensions
d. the HM Revenue & Customs standard for registering new occupational pension schemes

8. Investment managers must be authorised by the:

a. Pensions Regulator
b. Financial Conduct Authority
c. Association of British Insurers
d. Institute of Financial Planning

9. The responsibility for ensuring that a disputes procedure is in place for members of an occupational pension scheme rests with the:

a. employer
b. members
c. trustees
d. Pensions Regulator

10. Passive investment management is where the:

a. investment manager tracks a particular index
b. trustees invest directly in markets
c. trustees set asset allocation and stock selection
d. investment manager only holds cash

11. What is an index linked gilt?

a. A government stock, whose capital and interest increase in line with the RPI
b. An undated government stock with a variable interest rate
c. An equity which has preferential dividend rights
d. An expression used in the futures and options market

12. A final salary scheme is one which provides benefits at retirement based on:

a. the share of the fund attributed to the member
b. a proportion of final pensionable earnings at date of leaving
c. a proportion of pensionable salary at the date the member joined the scheme
d. the amount of contributions the member has paid

13. Which one of the following statements is true for a stakeholder pension schemes?

a. A minimum contribution of £50 can be set
b. Management charges must never exceed 0.50% p.a
c. A default investment option must be set
d. Employer contributions do not count towards the Annual Allowance

14. Personal pension schemes

a.  were introduced in April 2001
b.  are not open to anyone who is a member of an occupational pension scheme
c.  can accept higher contributions than stakeholder pension schemes
d.  offer an open market option

The questions below are a small sample of the multiple true false format.

15.

(i) All defined benefit occupational pension schemes are contracted out.
(ii) Defined contribution schemes cannot contract out of S2P.

a. Both true
b. Only (i) true
c. Only (ii) true
d. Both false

16.

(i) Opra was introduced by the Pensions Act 2004.
(ii) Opra was replaced by the Pensions Regulator.

a. Both true
b. Only (i) true
c. Only (ii) true
d. Both false

17.

(i) The Pensions Management Institute (PMI) offers nationally recognised pensions
    qualifications.
(ii) The PMI organises conferences and meetings for pensions professionals.

a. Both true
b. Only (i) true
c. Only (ii) true
d. Both false

18. From April 2006 a leaver from an occupational pension scheme with

(i) 3 years’ pensionable service cannot be offered a refund of contributions.
(ii) 18 months’ pensionable service can only be offered a refund of contributions.

a. Both true
b. Only (i) true
c. Only (ii) true
d. Both false

19.Savings to ISAs are:

(i)   subject to an annual limit for each year running from 1st January to 31st December
(ii)  made from net earnings.
 
a.  Both True
b.  Only (i) True
c.  Only (ii) True
d.  Both False