LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
A client is a member of a pooled registered pension plan (PRPP) or a voluntary retirement savings plan (VRSP in Quebec). These are:
- ADefined benefit plans that guarantee a formula pension to members of small employers
- Low-cost, portable DC-style plans through employers or for the self-employed, with some locking-in
- CGroup annuities purchased by employers to provide guaranteed lifetime income
- DTax-free savings accounts sponsored by employers with payroll deduction
Correct answer: B) Low-cost, portable DC-style plans through employers or for the self-employed, with some locking-in
PRPPs/VRSPs extend workplace saving to small employers and the self-employed. Understanding their locking rules is part of the assessment.
Why the other options are wrong
- AThey are account-based, not defined benefit.
- CThey are accumulation plans, not annuities.
- DThey are retirement plans, not TFSAs.
Exam tip
PRPP/VRSP: low-cost DC-style, portable, some locking.
Common mistake
Confusing a VRSP with a group RRSP's withdrawal rules.
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.