LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
A client asks how CPP disability and the CPP retirement pension interact. The agent should explain:
- AThe retirement pension is paid at 60 to disabled contributors, in place of the disability benefit
- CPP disability converts to the retirement pension at 65, with disability years excluded from the calculation
- CReceiving disability cancels the retirement pension, since a contributor may draw only one benefit
- DBoth are paid together for life, since they are earned separately through contributions
Correct answer: B) CPP disability converts to the retirement pension at 65, with disability years excluded from the calculation
The conversion at 65 and the drop-out provision protect disabled contributors' retirement pensions.
Why the other options are wrong
- AConversion occurs at 65, not 60.
- CRetirement follows disability; it is not cancelled.
- DThey are sequential, not concurrent.
Exam tip
CPP disability → retirement pension at 65 with disability drop-out.
Common mistake
Projecting a reduced CPP retirement pension for a long-disabled client.
What this tests
CISRO competency component 1.2 — Assess the client's needs and situation — which is weighted at 35% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 1
- The first step before recommending a segregated fund or annuity is to:
- A client's 'time horizon' for an investment is:
- 'Risk tolerance' in an investor profile refers to:
- A client says he wants 'high returns with no risk of losing money'. The agent should:
- Investment objectives are commonly classified as:
- Why is the client's marginal tax rate relevant to a segregated fund recommendation?
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.