LLQP Segregated Funds & Annuities · Component 2.4 · 30% of the exam
An Individual Pension Plan (IPP) is:
- AA deferred profit sharing plan set up for a single senior employee of a private company, funded from its profits
- BA group RRSP with a single member, used by owner-managers who have no other employees
- CA tax-free savings account with an enhanced limit for business owners over 40
- A DB pension for one person, typically an older owner-manager, allowing larger contributions than an RRSP
Correct answer: D) A DB pension for one person, typically an older owner-manager, allowing larger contributions than an RRSP
IPPs suit high-income incorporated professionals. They are complex and require actuarial valuation.
Why the other options are wrong
- AAn IPP is a defined benefit pension, not a profit-sharing plan.
- BIPPs are DB pensions, not RRSPs.
- CAn IPP is a pension plan, not a TFSA.
Exam tip
IPP: one-person DB plan, higher contributions, complexity, locking.
Common mistake
Recommending an IPP to a 30-year-old with modest income.
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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