LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
Old Age Security (OAS) is:
- A residence-based pension from 65, subject to a recovery tax at higher incomes, deferrable to 70
- BOnly for low-income seniors, since the program exists to bring retirees up to a minimum income
- CBased on CPP contributions, so a client who never worked in Canada receives nothing
- DAvailable from age 60 at a reduced rate, in the same way as the Canada Pension Plan
Correct answer: A) A residence-based pension from 65, subject to a recovery tax at higher incomes, deferrable to 70
OAS is funded from general revenue and tested by income through the recovery tax. It is a resource that investment income can reduce — a planning point.
Why the other options are wrong
- BGIS targets low income; OAS is a broader residence-based pension.
- COAS requires residence, not contributions.
- DOAS begins at 65; there is no early start at 60.
Exam tip
OAS: residence-based, 65+, clawback above the income threshold, deferrable to 70.
Common mistake
Ignoring the effect of investment income on OAS clawback.
What this tests
CISRO competency component 1.2 — Assess the client's needs and situation — which is weighted at 35% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 1
- The first step before recommending a segregated fund or annuity is to:
- A client's 'time horizon' for an investment is:
- 'Risk tolerance' in an investor profile refers to:
- A client says he wants 'high returns with no risk of losing money'. The agent should:
- Investment objectives are commonly classified as:
- Why is the client's marginal tax rate relevant to a segregated fund recommendation?
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.