PPAC 1 Module 4 Exam Questions & Answers 2024/2025
What is a defined benefit (DB) plan? - ANSWERSIt is a registered plan that provides a specific amount of pension at retirement, based on a formula.
What is the DB plan sponsor's overview in terms of obligation? - ANSWERSIt is to fund the pl...
What is a defined benefit (DB) plan? - ANSWERSIt is a registered plan that provides a specific amount of
pension at retirement, based on a formula.
What is the DB plan sponsor's overview in terms of obligation? - ANSWERSIt is to fund the plan and
provide the pension benefit promised. They must also prefund the plan for registration.
What is the DB plan sponsor's overview in terms of contribution? - ANSWERSThe employer's
contributions are determined by the actuarial valuation.
What is the DB plan member's overview in terms of contributions? - ANSWERSIt is specific in the plan
text, if any and typically a percentage of earnings is deducted from pay.
What is the DB plan member's overview in terms of pension benefit? - ANSWERSIt is determined by plan
formula and payable monthly for life.
What is defined in a DB plan? (Name 2) - ANSWERSThe unit benefit accrual rate and member
contributions, if contributory.
What is not defined in a DB plan? (Name 1) - ANSWERSThe employer's cost.
Which DB plans are earnings related? (Name 3) - ANSWERSCAE, FAE and integrated formula.
Which DB plan is not earnings related? (Name 1) - ANSWERSFlat benefit or dollar.
What is a single employer pension plan (SEPP)? - ANSWERSIt is established by one employer for its
employee. It allows for participation by related subsidiaries.
, What is a multi-employer pension plan (MEPP)? - ANSWERSIt is established by one or more participating
(unaffiliated) employers. It typically has a board of trustees that act as a capital administrator.
What is a specified multi-employer pension plan (SMEPP)? - ANSWERSIt is where employers participate
pursuant to a collective bargaining agreement and contributions are negotiated formulae and don't
fluctuate based on financial experience.
What is a multi-unit pension plan? - ANSWERSUnique to Manitoba, it is where collective agreements
require contributions be made and the administrator must be a board of trustee.
What is a jointly sponsored pension plan (JSPP)? - ANSWERSIt is a contributory DB plan where the
employers and members share responsibility in the plan governance and are responsible for any funding
shortfalls.
What is a hybrid-combination pension plan? - ANSWERSIt is where it provides lifetime retirement
benefits which has both a DB and DC element to it.
What is a target benefit pension (TBP)? - ANSWERSAlso known as the shared risk pension model, it is
funded through fixed employer and employee contributions with a target benefit level that is not
defined or guaranteed. The administrator has the power to reduce benefit is the plan's funding will not
support them.
What is the major risk for TBP? - ANSWERSThere is no guarantee to any benefit level where it may be
reduced if the fund cannot support the targeted benefit level.
What is the shared risk pension model? - ANSWERSAlso known as a target benefit pension and unique to
New Brunswick, the benefit formula is a target benefit based on an enhanced CAE. The member bears
the risk since if the plan performs poorly, the contributions levels may increase and benefits will be
reduced.
What is an individual pension plan (IPP)? - ANSWERSIt is established for the benefit of one employee.
What is a designated pension plan? - ANSWERSArranged for higher earners, it is a DB plan where more
than 50% of the pension credits are for specified active individual members.
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