Free Practice Questions for IFSE Institute LLQP Exam

As a plan administrator for a defined contribution pension plan (DCPP), Josie’s primary responsibility is to manage the pension plan, which includes overseeing day-to-day operations, ensuring regulatory compliance, and handling communications with plan members. According to LLQP, plan administrators are tasked with ensuring the effective management and administrationof the plan, rather than setting benefit structures or addressing funding issues, which are typically responsibilities of the employer​​.

Options B, C, and D describe responsibilities typically held by the employer or plan sponsor, not the administrator.

Rachel should inform Owen that some segregated funds offer an automatic reset feature, which adjusts the guaranteed value periodically based on the fund’s market performance. This can lock in gains during rising markets without requiring manual intervention. According to LLQP resources, automatic resets can occur on specific anniversaries or under certain conditions specified in the contract​.

Option A is incorrect as not all segregated funds offer a reset feature. Option C is incorrect as there may be costs associated with funds that provide reset options. Option D is incorrect because resets typically lock in gains, not losses.

Mohammed’s plan allows him to make contributions that are not tax-deductible, and he is also not taxed on withdrawals, indicating that his employer’s plan is a group TFSA. In a TFSA, contributions are made with after-tax dollars, and withdrawals (including any growth) are tax-free, consistent with the LLQP outline on TFSAs. This is distinct from other retirement accounts, such as RRSPs, which provide tax deductions on contributions but tax the withdrawals as income​​.

Options A, B, and D are incorrect because these plans involve different tax treatments where contributions may be tax-deductible, and withdrawals are generally taxable.

Upon termination of employment, employees cantransfer group RRSP funds to an individual RRSPto maintain tax-deferred growth without triggering a taxable event.

Exact Extract:

"Upon leaving employment, a member may transfer their group RRSP assets to an individual RRSP to maintain tax deferral."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 1.3.11.2 Group Plans【45:5†Segfunds-E313-2020-12-7ED.pdf**)

Group TFSA contributionsare made withafter-tax moneyand grow tax-free.GRRSP contributionsreduce taxable income immediately because they aretax-deductible.

Exact Extract:

"Contributions to a TFSA are not deductible and must be made with after-tax dollars. RRSP (andGRRSP) contributions are tax-deductible, reducing taxable income."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 1.3.11 Group Plans​)

Adeferred payout term annuityinvolves depositing funds now with payments starting after a deferment period (in Julia’s case, 3 years) and continuing for a set term (10 years).

Exact Extract:

"A deferred payout annuity begins income payments after a specified deferment period. If a fixed period is selected, it is known as a term annuity."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 3.2.1.1 Payout Annuity​)

ARegistered Education Savings Plan (RESP)is specifically designed to fundeducation savingsand allows contributions for a named beneficiary (Brienne), making it the perfect choice.

Exact Extract:

"An RESP is an education savings plan sponsored by the government, providing grants and tax-deferral advantages for beneficiaries saving for post-secondary education."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 1.3.11.3 Group Plans and Registered Education Savings Plans​)

Facing potential job loss, the priority for Priscilla should bebuilding an emergency fundrather than continuing to invest. Emergency funds provide essential liquidity in the event of unexpected income loss.

Exact Extract:

"Establishing an emergency fund to cover living expenses during unforeseen circumstances is fundamental before committing to longer-term investments like segregated funds."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 1.1.2.5 Liquidity​)

Given Pierre’sshort life expectancy, aterm annuity(paying for a specific period) would ensure he receivesguaranteed payments for a fixed number of years, aligning with his situation and providing steady cash flow.

Exact Extract:

"A term annuity pays a fixed income for a set number of years. It is appropriate for clients expecting a limited lifespan and wishing to maximize payouts during their lifetime."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 3.2.3 Duration of the Annuity【49:2†Segfunds-E313-2020-12-7ED.pdf**)