LLQP Segregated Funds & Annuities · Component 2.4 · 30% of the exam
An employee changing jobs asks whether to leave her balance in the former employer's group savings plan. The agent should point out that:
- Athe balance must be withdrawn in cash within thirty days of the employment ending
- Bthe former employer will continue to match contributions she makes from her new salary
- Cassets left behind are forfeited to the employer after a period of twelve months
- plan pricing and rules may change once she is no longer an active contributing member
Correct answer: D) plan pricing and rules may change once she is no longer an active contributing member
Some sponsors move departing members to retail pricing or restrict access to certain funds. The agent should compare the ongoing cost, the investment options and the service against a personal plan before recommending a move.
Why the other options are wrong
- AThere is no rule forcing a withdrawal when employment ends.
- BMatching stops when employment ends; there is nothing to match against.
- CMember assets belong to the member and are never forfeited to the employer.
Exam tip
Departing members often lose group pricing, so compare costs before advising.
Common mistake
Assuming group pricing continues automatically after a member leaves the employer.
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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