LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
A client's group RRSP at work is:
- ALocked-in, since money contributed through an employer plan is subject to pension legislation
- BTax-free on withdrawal, since payroll contributions are made from after-tax pay
- CA registered pension plan, so the employer bears the investment risk on the contributions
- A collection of individual RRSPs with payroll deduction, not locked-in but possibly restricted
Correct answer: D) A collection of individual RRSPs with payroll deduction, not locked-in but possibly restricted
Group RRSPs are convenient and often include employer matching. They are not pensions; the money remains the employee's RRSP.
Why the other options are wrong
- ARRSP funds are not locked-in, though employer rules may restrict withdrawals while employed.
- BWithdrawals are taxable like any RRSP.
- CIt is not a registered pension plan; the member bears the investment risk.
Exam tip
Group RRSP = individual RRSPs via payroll; not locked-in; matching is free money.
Common mistake
Not maximizing employer matching.
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.