LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
A client transferred a foreign pension to Canada years ago. The review should establish:
- AThat the client cannot hold Canadian registered plans while a foreign pension balance remains
- BThat it must be collapsed within ten years of the client becoming a Canadian resident
- CNothing further, since a transferred pension becomes an ordinary Canadian registered plan
- Whether it retains any foreign reporting or withholding characteristics, and what the transfer's tax treatment was
Correct answer: D) Whether it retains any foreign reporting or withholding characteristics, and what the transfer's tax treatment was
Cross-border transfers carry their own rules, and the client's reporting obligations and the treatment of the original transfer both affect what can be done with the money now.
Why the other options are wrong
- ACanadian registered plans are available regardless.
- BNo ten-year collapse rule exists.
- CForeign-sourced plans can carry continuing obligations.
Exam tip
Cross-border plans need specialist tax input.
Common mistake
Treating a transferred foreign pension as an ordinary registered account.
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.