LLQP Segregated Funds & Annuities · Component 2.4 · 30% of the exam
An employee wants to withdraw from her group registered savings plan to buy a car. The agent should first check:
- Awhether the employee has obtained the written consent of every other member of the group plan
- whether the employer has imposed withdrawal restrictions on the plan as a condition of the match
- Cwhether the stock market has risen enough in the current year to make a withdrawal worthwhile
- Dwhether the insurer allows withdrawals, since group plans are always locked until retirement
Correct answer: B) whether the employer has imposed withdrawal restrictions on the plan as a condition of the match
Many sponsors restrict access to employer contributions while employment continues, even though the law does not lock in group savings plan money. The agent should read the plan provisions before telling the member what is available.
Why the other options are wrong
- AOther members have no say in an individual member's account.
- CMarket levels do not determine whether a withdrawal is permitted by the plan.
- DGroup savings plan money is not locked in by legislation the way pension money is.
Exam tip
Group savings plans are not locked in by law, but sponsors often restrict the match.
Common mistake
Assuming group plan rules match the legislation rather than reading the plan itself.
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.