Friday Five Focus on Pensions – 2 June – 5 Questions in 5 Minutes

Friday Five Focus on Pensions – 5 Questions in 5 Minutes Every Friday

What’s this all about?

Each week, we ask questions relating to one of these topics: Investments, Taxation, Pensions, Protection, or Regulation. This week, our Friday Five is relevant to Pensions; this is useful as you prepare for the CII’s R04, AF7, or J05 exams. The challenge is for you to answer them in 5 minutes. Answers at the bottom of the page.

Questions

IMPORTANT! These questions relate to examinable tax year 2022/23, examinable by the CII until 31 August 2023. They do not relate to tax year 2023/24 which is only examinable by the CII from 1 September 2023.

1. Fred has a conventional lifetime annuity. Fred should be aware that the income he receives could fall compared to that paid in a previous year if he (Tick all that apply.)
   1. has just married.
   2. chose a with profit annuity at outset.
   3. chose an annuity linked to RPI.
   4. has reached the end of the guarantee period.

2. If HM Revenue & Customs (HMRC) withdraws registration of a registered pension scheme, then a de-registration income tax charge will be levied. This amounts to
   1. 40% of the prohibited assets which caused the scheme to be de-registered.
   2. 15% of the fund value held immediately before de-registration.
   3. 25% of the fund value held immediately before de-registration.
   4. 40% of the total value of funds held immediately before de-registration.

3. Which of the following was introduced for occupational defined contribution pension schemes using master trusts as part of the Pension Schemes Act 2017?
   1. Authorised schemes must submit monthly accounts to The Pensions Regulator.
   2. Schemes must submit monthly supervisory returns.
   3. Financial Conduct Authority powers to withdraw authorisation from a failing scheme.
   4. To be authorised those involved in the scheme must be ‘fit and proper’.

4. Saving for retirement through the use of a registered pension scheme provides your client with which of the following incentives?
   1. Half of the fund may be taken as a tax-free cash lump sum.
   2. Benefits available from age 50.
   3. Simplicity and ease of understanding.
   4. Tax relief for the member and any employer.

5. Freyja is hoping to qualify for a new State pension. To do so, she should be aware that she must (Tick all that apply.)
   1. have a minimum of 10 qualifying years to receive any new State pension.
   2. have at least 35 qualifying years to receive a full new State pension.
   3. reach her State pension age on or after 6 April 2016.
   4. have been employed or self-employed for at least 10 years.

Answers

1. BC – See R04 Study Text, Chp 7
   Grab our taster mock exam paper for CII R04. Click here to download.

2. D – See R04 Study Text, Chp 3
   Grab our taster mock exam paper for CII R04. Click here to download.

3. D – See R04 Study Text, Chp 6
   Grab our taster mock exam paper for CII R04. Click here to download.

4. D – See R04 Study Text, Chp 1
   Grab our taster mock exam paper for CII R04 Click here to download.

5. ABC – See R04 Study Text, Chp 9
   Grab our taster mock exam paper for CII R04. Click here to download.

How did you find this week’s questions? Did you complete them in 5 minutes? Did you get them all correct? Do you disagree with any?

If you found this quiz useful for your CII exam revision, please do share it with your colleagues.