LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
A client's employer offers a group TFSA. The assessment should note:
- AIt is a pension plan, so the employer's contributions create a pension adjustment
- It uses the employee's own TFSA room, and any employer contribution is a taxable benefit
- CIt is locked-in until retirement, since it was established through the employer
- DIt has separate room from a personal TFSA, so the employee can contribute the limit to each
Correct answer: B) It uses the employee's own TFSA room, and any employer contribution is a taxable benefit
Group TFSAs are administered through the employer but count against the individual's cumulative room.
Why the other options are wrong
- AIt is a savings vehicle, not a pension, and creates no pension adjustment.
- CTFSAs are never locked-in.
- DThere is only one TFSA room per person.
Exam tip
Group TFSA uses personal room; employer contributions are taxable benefits.
Common mistake
Over-contributing by ignoring the group TFSA when funding a personal one.
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
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