LLQP Segregated Funds & Annuities · Component 4.1 · 10% of the exam
A client wants to convert her segregated fund RRSP to a RRIF at 65 to use the pension income credit. The agent should:
- ACash out the RRSP, since the proceeds will qualify as pension income once she is 65
- BConvert the entire RRSP, since partial conversion is not permitted under the Income Tax Act
- Process a partial conversion, set the payment to capture the eligible amount, elect the age basis, and confirm designations
- DDecline until she turns 71, since a RRIF cannot be opened before the year in which conversion becomes mandatory under the Act
Correct answer: C) Process a partial conversion, set the payment to capture the eligible amount, elect the age basis, and confirm designations
Early partial RRIF conversion is a standard tax planning service at 65.
Why the other options are wrong
- ACashing out the RRSP would trigger unnecessary tax.
- BPartial conversion is allowed.
- DConversion is allowed at any age.
Exam tip
At 65: partial RRIF for the pension credit.
Common mistake
Missing the pension income credit opportunity.
What this tests
CISRO competency component 4.1 — Provide customer service during the validity period of the coverage — which is weighted at 10% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 4
- A client's daughter was born last month and the client wants her added to the segregated fund designation. The agent should:
- A client wants to withdraw part of his segregated fund before maturity. The agent should explain:
- A client's segregated fund contract is approaching its maturity date. The insurer will:
- A client asks to add her adult son as a joint owner of her non-registered segregated fund contract. The agent should explain that:
- A client wants to replace the beneficiary on a contract where the current designation was made irrevocable. The agent must explain that:
- A client who has lost her job asks to pause her pre-authorized monthly contributions for six months. The agent should:
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.