LLQP Segregated Funds & Annuities · Component 2.4 · 30% of the exam
A 'supplemental executive retirement plan' (SERP):
- AAvailable to all employees as a top-up to the registered pension, funded by the employer from current earnings
- An unregistered arrangement paying executives benefits above registered limits, taxable when received
- CIs a tax-free savings account with a higher limit reserved for senior executives
- DIs a registered plan subject to the same contribution limits as any other pension
Correct answer: B) An unregistered arrangement paying executives benefits above registered limits, taxable when received
SERPs top up registered pensions for high earners. Security of the promise is a key concern.
Why the other options are wrong
- ASERPs are for executives above registered limits, not all employees.
- CA SERP is a retirement top-up arrangement, not a TFSA.
- DA SERP is an unregistered arrangement.
Exam tip
SERP: unregistered top-up for executives; check funding/security.
Common mistake
Treating a SERP promise as secure as a registered pension.
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
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