Pensions and Benefits Midterm - June 20th : July 8th

1. What is a pension plan?

 A) A savings account for daily expenses

 B) A savings plan set up by your job for retirement
 C) A loan for education
 D) An insurance policy for health
 Answer: B) A savings plan set up by your job for retirement

2. In a defined benefit plan, retirement benefits are based on:

 A) Employee's contributions only

 B) Investment returns only
 C) Salary history and duration of employment
 D) Market fluctuations
 Answer: C) Salary history and duration of employment

3. Which of the following is a government program that provides monthly payments to

retired Canadians?

 A) TFSA
 B) RRSP
 C) CPP
 D) HSA
 Answer: C) CPP

4. What is the purpose of a Tax-Free Savings Account (TFSA)?

 A) To save for education

 B) To invest money without paying taxes on the earnings
 C) To pay off debts
 D) To save for a house down payment
 Answer: B) To invest money without paying taxes on the earnings

5. What does "vesting" in a pension plan mean?

 A) The process of increasing your salary

 B) The right to keep your employer's contributions to your pension plan
 C) The act of withdrawing money from your pension early
 D) The ability to transfer pension benefits to another plan
 Answer: B) The right to keep your employer's contributions to your pension plan

6. A Health Spending Account (HSA) is:

  A) An account funded by your employer for health expenses
 B) A savings account for retirement
 C) A personal savings account for vacation
 D) An insurance plan for accidents
 Answer: A) An account funded by your employer for health expenses

7. What is the primary feature of a Defined Contribution Plan?

 A) Fixed retirement benefits

 B) Employer guarantees a certain payout
 C) Benefits based on investment performance
 D) Lifetime benefits regardless of contributions
 Answer: C) Benefits based on investment performance

8. What is a Group RRSP?

 A) A personal savings plan for retirement

 B) An employer-sponsored RRSP with payroll contributions
 C) A government pension program
 D) A health insurance plan
 Answer: B) An employer-sponsored RRSP with payroll contributions

9. The Canada Pension Plan (CPP) is funded by:

 A) Government taxes only

 B) Employee and employer contributions
 C) Employer contributions only
 D) Employee contributions only
 Answer: B) Employee and employer contributions

10. Which benefit provides income replacement during a medically-related absence from
work?

 A) Life insurance
 B) Long-term disability insurance
 C) Critical illness insurance
 D) Health Spending Account
 Answer: B) Long-term disability insurance

11. What is an annuity?

 A) A type of loan
 B) A financial product that provides regular payments in retirement
 C) A health insurance policy
 D) A savings account for daily expenses
 Answer: B) A financial product that provides regular payments in retirement
12. What does the term "locking-in" refer to in pension plans?

 A) Preventing early withdrawal of pension funds

 B) Increasing contributions
 C) Decreasing benefits
 D) Switching from one plan to another
 Answer: A) Preventing early withdrawal of pension funds

13. What is the role of a plan administrator?

 A) To contribute to employees' pensions

 B) To manage and ensure the pension plan complies with regulations
 C) To fund the pension plan
 D) To provide medical benefits
 Answer: B) To manage and ensure the pension plan complies with regulations

14. What is Employment Insurance (EI)?

 A) A pension plan
 B) Temporary financial assistance for unemployed Canadians
 C) A health insurance plan
 D) An investment account
 Answer: B) Temporary financial assistance for unemployed Canadians

15. What is the Pension Adjustment (PA)?

 A) A tax penalty for withdrawing RRSP funds early

 B) The reduction in RRSP contribution room due to benefits earned in a pension plan
 C) An increase in pension benefits
 D) An adjustment to account for inflation
 Answer: B) The reduction in RRSP contribution room due to benefits earned in a
pension plan

16. Critical Illness Insurance provides:

 A) Regular monthly payments in retirement

 B) A lump-sum payment if diagnosed with a serious illness
 C) Coverage for daily medical expenses
 D) Temporary income replacement during unemployment
 Answer: B) A lump-sum payment if diagnosed with a serious illness

17. Which benefit is specifically for temporary income replacement due to a short-term
medical condition?

 A) Short-term disability insurance

 B) Long-term disability insurance
  C) Critical illness insurance
 D) Life insurance
 Answer: A) Short-term disability insurance

18. What is a Flexible Benefits Plan (Flex Plan)?

 A) A savings account for education

 B) A benefits program allowing employees to choose from a range of options
 C) A fixed benefits package provided by the employer
 D) A government pension plan
 Answer: B) A benefits program allowing employees to choose from a range of
options

19. Which term describes extra payments from a pension plan until the retiree qualifies for
government benefits?

 A) Bridge Benefit
 B) Vesting
 C) Commuted Value
 D) Survivor Benefits
 Answer: A) Bridge Benefit

20. What is the purpose of Cost-of-Living Adjustments (COLA) in pension plans?

 A) To increase pension benefits based on the employee's salary

 B) To adjust pension benefits to keep up with inflation
 C) To provide additional health benefits
 D) To reduce pension contributions
 Answer: B) To adjust pension benefits to keep up with inflation

21. What does the term "pensionable earnings" refer to?

 A) The total earnings an employee has over their lifetime

 B) The part of an employee's earnings used to calculate pension contributions
 C) The bonus earnings added to an employee's pension
 D) The earnings that are tax-free
 Answer: B) The part of an employee's earnings used to calculate pension
contributions

22. What is a commuted value?

 A) The total amount contributed to a pension plan

 B) The lump-sum value of future pension payments if taken today
 C) The value of health benefits provided by an employer
 D) The annual increase in pension benefits
 Answer: B) The lump-sum value of future pension payments if taken today
23. Who is typically the plan sponsor of a pension plan?

 A) The government
 B) The employee
 C) The employer
 D) An insurance company
 Answer: C) The employer

24. What is a Retirement Compensation Arrangement (RCA)?

 A) A personal savings plan

 B) A plan providing extra retirement benefits for certain employees
 C) A health insurance plan
 D) A temporary unemployment benefit
 Answer: B) A plan providing extra retirement benefits for certain employees

25. What is an Employee Assistance Program (EAP)?

 A) A retirement savings plan

 B) A program offering free help for personal problems
 C) A health insurance plan
 D) A government pension program
 Answer: B) A program offering free help for personal problems

26. What is the main feature of a defined contribution plan?

 A) Fixed retirement benefits based on salary

 B) Retirement benefits based on contributions and investment performance
 C) Lifetime benefits regardless of contributions
 D) Government-mandated payouts
 Answer: B) Retirement benefits based on contributions and investment
performance

27. What is a survivor benefit?

 A) Extra health benefits for employees

 B) Payments made to family members after the pension plan member's death
 C) A lump-sum payment for critical illness
 D) Temporary income replacement during unemployment
 Answer: B) Payments made to family members after the pension plan member's
death

28. What is a non-registered savings plan?

 A) A savings plan with tax-deferred status

 B) A savings plan without the tax benefits of registered plans
  C) A government pension program
 D) An employer-sponsored retirement plan
 Answer: B) A savings plan without the tax benefits of registered plans

29. What is the role of the plan administrator?

 A) To fund the pension plan

 B) To manage the pension plan and ensure compliance with regulations
 C) To contribute to employees' pensions
 D) To provide medical benefits
 Answer: B) To manage the pension plan and ensure compliance with regulations

30. What is the Pension Adjustment Reversal (PAR)?

 A) An increase in RRSP contribution room due to reduced pension benefits

 B) A decrease in pension benefits
 C) An adjustment for inflation
 D) A tax penalty for early withdrawal of pension funds
 Answer: A) An increase in RRSP contribution room due to reduced pension benefits