LLQP Segregated Funds & Annuities · Component 2.4 · 30% of the exam
A Registered Pension Plan's 'vesting' means:
- The member has earned a non-forfeitable right to employer-contributed benefits, within statutory periods
- BThe member becomes the legal owner of the plan and may direct how its assets are invested from that point on
- CThe plan terminates and the assets are distributed to members in proportion to their service
- DContributions are refunded to the member in cash when the member leaves the employer
Correct answer: A) The member has earned a non-forfeitable right to employer-contributed benefits, within statutory periods
Vesting protects employer contributions for members who leave. Unvested contributions are forfeited.
Why the other options are wrong
- BOwnership of the plan rests with the sponsor or trust.
- CVesting concerns individual rights, not termination.
- DVesting keeps contributions in the plan for the member.
Exam tip
Vesting = right to employer contributions; check the period.
Common mistake
Assuming all employer contributions are the employee's from day one under every plan.
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.