ASPPA CPC Certified Pension Consultant

A consultant is advising a 200-employee employer that wants a single retirement program covering employees of two unrelated subsidiaries with different payroll providers. Which arrangement BEST satisfies the client's goal while reducing administrative burden under SECURE Act §101 simplification?

• AAdopt a Pooled Employer Plan (PEP) sponsored by a registered pooled plan provider (PPP) u…
• BEstablish two separate single-employer 401(k) plans linked by a master trust
• CUse a SIMPLE IRA at each subsidiary with cross-subsidization
• DFile a Form 5500 Direct Filing Entity (DFE) election

Under the SECURE Act 'one bad apple' relief codified at IRC §413(e), what happens to a participating employer in a MEP that fails to satisfy a qualification requirement after the employer refuses to take corrective action?

• AOnly the noncompliant employer's portion of plan assets is spun off and treated as a sepa…
• BThe entire MEP is disqualified retroactively to the year of the failure
• CThe MEP loses its tax-exempt trust status only for the noncompliant year
• DEach participating employer must pay its pro-rata share of the §4971 excise tax

A PEP's Pooled Plan Provider (PPP) wants to charge participating employers an asset-based administrative fee paid from plan assets. Which fiduciary requirement is MOST directly implicated?

• AThe PPP must acknowledge ERISA §3(16) and §3(21) fiduciary status and ensure the fee is r…
• BThe fee must be approved by a majority vote of all participating employers each plan year
• CThe PPP must obtain a private letter ruling under §401(a)(35) before charging the fee
• DThe fee must be capped at 50 basis points by DOL regulation

Acme Corp (calendar-year 401(k)) wants to terminate its plan effective 9/30/2026 because it is being acquired. Under Rev. Rul. 89-87, what is the LATEST date for distributions to begin so that the plan can be treated as terminated for §401(k)(10) purposes?

• ADistributions must generally be made 'as soon as administratively feasible,' typically wi…
• BDistributions must be completed by the close of the termination plan year
• CDistributions must be completed within 60 days of the termination resolution
• DDistributions must be completed before the §401(k)(10) successor-plan 12-month window clo…

Buyer Co acquires Seller Co in an asset purchase and continues employing 90% of Seller's workforce. Seller terminates its 401(k) plan one day before closing and distributes all account balances. Why does the §401(k)(10) successor-plan rule potentially invalidate the distributions?

• AIf Buyer establishes or maintains an 'alternative defined contribution plan' covering the…
• BBecause Seller's termination occurred within 12 months of the asset purchase, all distrib…
• CBecause §410(b)(6)(C) requires the Buyer to cover Seller employees for at least one year…
• DBecause the §401(k)(10) rule prohibits any plan termination during the year of an M&A tra…

Megacorp sponsors a frozen overfunded defined benefit plan with $50M in assets and $30M in liabilities. To recover the $20M surplus without incurring the full §4980 50% excise tax (in addition to income tax), Megacorp can establish what arrangement?

• AA Qualified Replacement Plan (QRP) under §4980(d) that receives at least 25% of the surpl…
• BA §401(h) medical retiree account funded entirely from the surplus, eliminating all excis…
• CA §415(m) excess benefit plan funded from the surplus, eliminating excise tax
• DA §409A nonqualified deferred compensation plan that absorbs the surplus tax-free

To meet the §4980(d) QRP allocation requirement, surplus assets transferred to the QRP must be allocated to participant accounts under which schedule?

• AEither immediately on transfer or ratably over a period not exceeding 7 years, with any u…
• BOver 10 years using a straight-line method
• COver the participant's remaining working lifetime, but not less than 5 years
• DIn a single lump sum no later than the close of the plan year following the transfer

A cross-tested new-comparability profit sharing plan groups owners into one allocation rate group and rank-and-file NHCEs into another. Under Treas. Reg. §1.401(a)(4)-8, to test on a benefits basis, the plan must satisfy the minimum gateway. Which requirement is correct?

• AEach NHCE must receive an allocation rate of at least one-third of the highest HCE alloca…
• BEach NHCE must receive an allocation rate of at least 50% of the average HCE allocation r…
• CEach NHCE must receive at least the top-heavy minimum of 3% of compensation
• DEach NHCE must receive a 7.5% nonelective contribution to qualify as a QACA-style gateway

In a cross-tested plan, an HCE receives a 20% profit sharing allocation. What is the lowest NHCE allocation rate that still satisfies the broadly-available minimum gateway?

• A5% of §415 compensation (because 1/3 of 20% = 6.67%, but the 5% safe harbor cap applies)
• B6.67% of §415 compensation (must match 1/3 of the highest HCE rate regardless of the 5% c…
• C3% of compensation as the top-heavy minimum
• D7.5% of §401(a)(17) compensation

Combined DB/DC plans that aggregate for §401(a)(4) testing must satisfy a higher minimum gateway. Under Treas. Reg. §1.401(a)(4)-9(b)(2)(v), what is that floor?

• AEach NHCE must receive an aggregate normal allocation rate of at least 7.5% of §415 compe…
• BEach NHCE must receive at least 5% of compensation in the DC plan and accrue at least 1%…
• CEach NHCE must receive at least 3% top-heavy minimums in both plans
• DEach NHCE must receive an equivalent accrual rate of at least 0.5% of pay

Under EPCRS Rev. Proc. 2021-30 as expanded by SECURE 2.0 §305, which correction program allows a plan sponsor to self-correct an 'eligible inadvertent failure' without IRS submission, even if the failure is significant and discovered after the 3-year correction window historically required?

• ASelf-Correction Program (SCP), which SECURE 2.0 §305 expanded to permit indefinite self-c…
• BVoluntary Correction Program (VCP) with a $0 user fee for eligible inadvertent failures
• CAudit Closing Agreement Program (Audit CAP) with the standard sanction reduced by 75%
• DAnonymous VCP requiring no plan sponsor disclosure

A plan failed to implement a participant's $500/month deferral election for 9 months. Under EPCRS safe harbor for missed deferrals when automatic enrollment is in place and the failure is corrected within 9.5 months of the close of the plan year, what is the required corrective contribution from the employer?

• A0% QNEC for missed deferrals plus 100% match make-up; notice to the participant within 45…
• B50% QNEC for missed deferrals plus 100% of any matching contribution that would have been…
• C25% QNEC for missed deferrals plus the missed match
• D100% QNEC equal to the entire missed deferral amount

A plan sponsor late-deposited employee deferrals 12 days after each payday for the entire 2025 plan year. The lost earnings total $1,400. Which DOL program is the appropriate correction vehicle?

• AVoluntary Fiduciary Correction Program (VFCP), depositing principal plus lost earnings ca…
• BEPCRS VCP, because late deposits are operational failures only
• CForm 5330 self-filing alone, since VFCP is only for prohibited transactions involving rea…
• DAudit CAP, because late deposits are always discovered on examination

A plan loaned $250,000 of plan assets to the employer (a party in interest) at a below-market interest rate of 1%. Why is this a prohibited transaction even though the loan is to be repaid in full?

• AERISA §406(a)(1)(B) and §406(a)(1)(D) treat any extension of credit between a plan and a…
• BOnly because the interest rate is below market; an arms-length rate would cure the violat…
• COnly because the loan exceeds $250,000; loans below that threshold are exempt under §408(…
• DOnly because the loan exceeds 50% of plan assets, violating §407 employer security limits

PTE 2020-02 permits an investment fiduciary to receive compensation that would otherwise be prohibited under ERISA §406(b) if certain conditions are met. Which condition is required by PTE 2020-02?

• AThe fiduciary provides a written acknowledgment of fiduciary status, complies with Impart…
• BThe fiduciary obtains a private letter ruling for each rollover recommendation
• CThe fiduciary refunds all 12b-1 fees to participants quarterly
• DThe fiduciary registers exclusively as a §3(38) investment manager

A 401(k) plan committee selected an in-house proprietary target-date fund managed by the plan sponsor's affiliate, charging 75 basis points when comparable institutional TDFs charge 25 basis points. Which fiduciary breach is MOST likely under recent ERISA excess-fee litigation precedent (e.g., Hughes v. Northwestern, 142 S. Ct. 737 (2022))?

• ABreach of the §404(a) duty of prudence by failing to engage in a reasoned, ongoing proces…
• BPer se §406(b)(1) self-dealing prohibited transaction with no possible cure
• CBreach of the §404(c) participant-direction safe harbor
• DViolation of §404(a)(5) participant fee disclosure rules

Which case established that ERISA fiduciaries have a CONTINUING duty to monitor plan investments, separate and apart from the duty exercised when the investment was originally selected?

• ATibble v. Edison International, 575 U.S. 523 (2015)
• BFifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409 (2014)
• CLaRue v. DeWolff, 552 U.S. 248 (2008)
• DConkright v. Frommert, 559 U.S. 506 (2010)

Fifth Third Bancorp v. Dudenhoeffer fundamentally changed ERISA 'stock drop' litigation by eliminating which doctrine?

• AThe Moench presumption of prudence for ESOP/employer-stock fiduciaries, replacing it with…
• BThe §404(c) participant-direction defense for employer stock
• CThe §3(38) investment-manager safe harbor for company stock
• DThe §407(d)(3) 10% qualifying employer security limit

A DB plan sponsor wants to provide retiree medical benefits funded inside the qualified plan. Which IRC provision permits a separate medical-benefits account within a DB plan, subject to subordination limits?

• AIRC §401(h), which allows medical accounts within a pension plan as long as medical contr…
• BIRC §401(k), through a separate account election
• CIRC §419A, which permits a 10-year welfare benefit account
• DIRC §125, which permits a cafeteria plan feature

What is the 2026 IRC §415(c) annual additions limit for defined contribution plans (employee plus employer plus forfeitures)?

• A$72,000
• B$66,000
• C$70,000
• D$76,500

What is the 2026 IRC §415(b) maximum annual benefit under a defined benefit plan, payable as a straight life annuity at the participant's social security retirement age?

• A$290,000
• B$275,000
• C$280,000
• D$300,000

What is the 2026 IRC §401(a)(17) compensation limit used in qualified plan testing and allocations?

• A$360,000
• B$345,000
• C$350,000
• D$370,000

What is the 2026 IRC §402(g) elective deferral limit for 401(k), 403(b), and most 457(b) plans (regular limit, no catch-up)?

• A$24,500
• B$23,000
• C$23,500
• D$25,000

Under SECURE 2.0 §603, participants whose prior-year FICA wages from the plan sponsor exceeded $145,000 (indexed) must make their age-50 catch-up contributions on a Roth basis. When does this requirement become operationally effective after IRS Notice 2023-62 transition relief expired?

• AJanuary 1, 2026 (after a 2-year administrative transition period)
• BJanuary 1, 2024, when SECURE 2.0 §603 was originally enacted
• CJanuary 1, 2027, after a 3-year administrative transition period
• DJanuary 1, 2025, after a 1-year administrative transition period

Under SECURE 2.0 §101, which new 401(k) and 403(b) plans must include an automatic enrollment feature starting at 3%-10% with auto-escalation of 1% per year to at least 10% (but not more than 15%)?

• APlans established after December 29, 2022, becoming effective for plan years beginning af…
• BAll 401(k) plans regardless of establishment date, effective January 1, 2025
• COnly plans with more than 100 participants, effective January 1, 2026
• DOnly safe harbor 401(k) plans, effective January 1, 2024

SECURE 2.0 §127 authorizes Pension-Linked Emergency Savings Accounts (PLESAs). Which feature is correct?

• APLESAs are sidecar Roth accounts for NHCEs only, capped at $2,500 (or lower employer-set…
• BPLESAs are pre-tax accounts available to all participants regardless of compensation
• CPLESAs are funded entirely by employer contributions with no employee deferral component
• DPLESAs are capped at $10,000 with no withdrawal restrictions

SECURE 2.0 §110 permits employers to make matching contributions on a participant's qualified student loan payments (QSLPs). Which design constraint applies?

• AQSLP match must use the same match formula/rate as regular elective deferrals, may be mad…
• BQSLP match must be at twice the rate of regular deferral matches
• CQSLP match is limited to NHCEs only
• DQSLP match counts toward the §415(c) annual additions limit only if the loan exceeds $50,…

Under SECURE 2.0 §107, the Required Beginning Date (RBD) for Required Minimum Distributions was changed. What is the RMD age for a participant who turns 73 in 2026?

• AAge 73 (RBD is April 1 of the calendar year following the year the participant turns 73)
• BAge 72
• CAge 75
• DAge 70½

A plan sponsor wants to spin off the retirement plan covering a division being sold. Under IRC §414(l), what is the MINIMUM requirement for the spinoff to be tax-qualified?

• AEach participant must receive a benefit immediately after the spinoff that is at least eq…
• BEach participant must receive at least 25% more than the pre-spinoff benefit
• CAll spinoff assets must equal exactly 50% of the original plan's assets
• DThe spinoff must be approved by the IRS via determination letter before assets transfer

When a defined benefit plan is terminated in a STANDARD termination under PBGC rules, what is the timing requirement for the Notice of Intent to Terminate (NOIT)?

• ANOIT must be given to affected parties (participants, beneficiaries, alternate payees, un…
• BNOIT must be given at least 30 days before the proposed termination date
• CNOIT must be given at least 180 days before the proposed termination date
• DNOIT must be given only to participants, with no PBGC notice required

A DB plan does not have sufficient assets to pay all benefit liabilities and cannot afford to make contributions to cover the shortfall. The employer is in severe financial distress. Which PBGC termination process applies?

• ADistress termination under ERISA §4041(c), requiring the employer to meet one of four dis…
• BStandard termination with reduced benefits
• CPartial termination with §411(d)(3) full vesting
• DVoluntary involuntary termination under ERISA §4042

Holdco owns 100% of Sub A and 60% of Sub B (the remaining 40% is owned by an unrelated third party). Under IRC §414(b) and §1563(a)(1), are Holdco, Sub A, and Sub B a parent-subsidiary controlled group?

• AHoldco and Sub A are a controlled group (100% ownership exceeds the 80% threshold), but S…
• BAll three are a controlled group because Holdco owns more than 50% of both subs
• CAll three are a controlled group under the brother-sister rules
• DNone are a controlled group because Sub B has minority third-party ownership

Under IRC §414(m) Affiliated Service Group (ASG) rules, an A-Organization (A-Org) ASG requires which key relationship?

• AA First Service Organization (FSO) and an A-Org service organization where the A-Org is a…
• BTwo service organizations with overlapping management functions
• CA service organization that performs management functions for a recipient
• DA professional services partnership with at least 5 partners

Under EPCRS Rev. Proc. 2021-30, an Anonymous VCP submission requires what before the IRS can issue a Compliance Statement?

• AThe plan sponsor's identity must be disclosed within 21 days of the IRS's request, after…
• BThe identity never needs to be disclosed if the user fee is paid in full
• CThe identity is automatically disclosed after 90 days regardless of IRS request
• DIdentity is required only if the failure is later discovered on examination

An overpayment (e.g., a participant was paid more than the correct benefit amount under the plan terms) is now subject to expanded EPCRS correction options under SECURE 2.0 §301. Which option is NEW under §301?

• AThe plan sponsor may treat the overpayment as if it were an eligible rollover distributio…
• BThe participant must always repay the overpayment in full to the plan within 60 days
• CThe plan must reduce future benefit accruals by the overpayment amount
• DThe plan must file Form 5500-EZ to disclose the overpayment

A plan failed coverage testing under §410(b) because the HCE ratio is too high relative to the NHCE ratio. The failure is corrected by retroactive amendment under EPCRS to bring in NHCEs. Under Rev. Proc. 2021-30, the amendment is permitted as an SCP correction if which condition is met?

• AThe amendment expands the plan to cover additional NHCEs and increases the benefits/right…
• BThe amendment reduces HCE benefits to match NHCE benefits, with no NHCE changes
• CThe amendment is filed via VCP with the standard user fee
• DThe amendment is approved by participants via majority vote

Under PTE 84-14 (the QPAM Exemption), a Qualified Professional Asset Manager may permit certain otherwise-prohibited transactions if which condition is satisfied?

• AThe QPAM (a bank, insurance company, or registered investment adviser meeting minimum equ…
• BThe transaction is approved by a majority of plan participants
• CThe QPAM is registered with the PBGC as a fiduciary
• DThe transaction is reviewed by an independent CPA

A plan's trustee causes the plan to purchase real estate from the plan sponsor at fair market value of $500,000. Why is this a prohibited transaction notwithstanding the FMV price?

• AERISA §406(a)(1)(A) prohibits any sale or exchange of property between a plan and a party…
• BThe transaction is only prohibited if the price exceeds FMV by more than 10%
• CThe transaction is only prohibited if the property is leveraged
• DThe transaction is only prohibited if the trustee personally benefits

Recent ERISA missing-participant litigation (e.g., Bay Area Painters v. various plans) has focused on what fiduciary duty?

• AThe duty to use reasonable search methods to locate missing participants and beneficiarie…
• BThe duty to escheat to state unclaimed-property funds within 90 days of missing-participa…
• CThe duty to transfer missing-participant accounts to the IRS Default IRA Program
• DThe duty to deduct missing-participant amounts from the plan's funding ratio

In a PEP, who is the §3(16) Plan Administrator with primary responsibility for Form 5500 filing and participant disclosures?

• AThe Pooled Plan Provider (PPP), per ERISA §3(44)(A), assumes §3(16) plan administrator du…
• BEach participating employer is the §3(16) administrator for its own employees
• CThe recordkeeper is automatically the §3(16) administrator by default
• DThe trustee is the §3(16) administrator unless a written delegation states otherwise

A new-comparability profit sharing plan has three rate groups: Owners (allocation rate 20%), Managers (allocation rate 10%), and Staff (allocation rate 5%). Each rate group must satisfy §410(b) coverage testing on a benefits-projected basis. Which test must each individual rate group pass?

• AEach rate group is treated as a separate plan and must satisfy the §410(b) ratio percenta…
• BOnly the highest rate group must satisfy §410(b); lower rate groups are automatically dee…
• CEach rate group must independently satisfy ADP/ACP testing
• DEach rate group must satisfy the §401(k)(3) safe harbor

Under §401(a)(4) and cross-testing on benefits, the equivalent benefit accrual rate (EBAR) for a DC contribution is determined by which formula?

• AProject the allocation to the participant's testing age using a standard interest rate (t…
• BDivide the contribution by current compensation and multiply by 12
• CDivide the contribution by §415 compensation and multiply by 100
• DUse the participant's actual age and assumed retirement age with no interest projection

A DB plan freezes future accruals but continues paying existing accrued benefits. Which type of freeze permits the plan to continue counting service for vesting and eligibility (but not benefit accrual)?

• AA 'soft freeze' that ceases benefit accruals for some or all participants but continues v…
• BA 'hard freeze' that ceases all accruals AND eliminates vesting service credit
• CA partial termination that fully vests all affected participants
• DA §411(d)(6) protected benefit reduction

Under IRS guidance (Rev. Rul. 2007-43), a 'partial termination' occurs when employer-initiated turnover exceeds approximately what percentage of participants in a plan year?

• A20% (a rebuttable presumption based on facts and circumstances, with affected participant…
• B10% (a bright-line rule)
• C33% (a bright-line rule)
• D50% (a bright-line rule)

A consultant is asked to evaluate whether an employer's contribution to a §401(h) account would create unrelated business taxable income (UBTI) if invested in master limited partnerships. Under §401(h) and related guidance, what is the result?

• A§401(h) accounts are part of the qualified pension plan trust and are generally exempt fr…
• B§401(h) accounts are taxable trusts and pay regular corporate tax
• C§401(h) accounts are fully exempt from UBTI regardless of investment
• D§401(h) accounts trigger §4980 reversion tax on any investment income

Which 2026 dollar threshold defines a Highly Compensated Employee (HCE) under §414(q) for plan-year compensation lookback?

• A$160,000 in prior-year compensation (with the optional top-paid-group election to limit t…
• B$155,000 in prior-year compensation
• C$150,000 in prior-year compensation
• D$165,000 in prior-year compensation

Under SECURE 2.0 §103, the Saver's Match (replacing the Saver's Credit) becomes effective for tax years beginning after December 31, 2026. How is the match paid?

• AAs a federal matching contribution of up to 50% of the first $2,000 contributed (maximum…
• BAs a federal tax credit on Form 1040 that reduces income tax liability dollar-for-dollar
• CAs a direct deposit to the participant's bank account
• DAs an employer-paid credit reimbursed via Form W-2