LLQP Segregated Funds & Annuities · Component 2.4 · 30% of the exam
A group RRSP compared with a DC pension plan:
- AIs a defined benefit plan, since the employer's contributions are set by formula
- BRequires a pension adjustment only for the employer's contributions, not the employee's own payroll contributions
- Outside pension law: not locked-in, no statutory vesting, and employer contributions are taxable salary
- DIs locked-in under pension legislation once the employer has made any contribution
Correct answer: C) Outside pension law: not locked-in, no statutory vesting, and employer contributions are taxable salary
Group RRSPs are simpler and more flexible than pensions; contributions count as the employee's RRSP contributions.
Why the other options are wrong
- AA group RRSP is an account-based plan, not a defined benefit plan.
- BThere is no pension adjustment for group RRSPs; contributions use RRSP room directly.
- DGroup RRSP funds are not locked-in under pension legislation.
Exam tip
Group RRSP: flexible, not locked-in, uses RRSP room.
Common mistake
Confusing group RRSP withdrawal restrictions with pension locking.
What this tests
CISRO competency component 2.4 — Analyze the available products that meet the client's needs — which is weighted at 30% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 2
- A segregated fund's 'guaranteed amount' after a partial withdrawal under proportional reduction is:
- A distinctive estate advantage of a segregated fund over a non-registered mutual fund held jointly with a child is:
- Segregated fund guarantees are most valuable relative to their cost when:
- A segregated fund's annual statement reports:
- Compared with a segregated fund, an exchange-traded fund (ETF) generally offers:
- A segregated fund's 'automatic death benefit reset' feature:
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.