Friday Five Focus on Pensions – 20 October – 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 2023/24, examinable by the CII until 31 August 2024.

1. Manesh is a member of a defined contribution pension scheme but does NOT receive an annual Statutory Money Purchase Illustration (SMPI). This is because Manesh has a
   1. personal pension.
   2. Stakeholder Pension.
   3. Self-Invested Personal Pension.
   4. Retirement Annuity Contract.

2. Debbie has a basic salary of £40,000 and benefits in kind totalling £7,500 per annum. Debbie’s employer contributes 5% of her basic salary to her pension and Debbie tops this up with a contribution of 8% of her total relevant UK earnings. What is the total gross contribution being made to her pension plan?
   1. £4,640
   2. £5,850
   3. £6,175
   4. £5,800

3. Farley Ltd’s occupational pension scheme is underfunded, and The Pensions Regulator has concluded they are insufficiently resourced, what measure can they issue?
   1. A contribution notice.
   2. A financial support direction.
   3. A financial penalty.
   4. A restoration order.

4. Jim crystallised benefits from a personal pension five years ago and took a PCLS together with flexi-access drawdown income. During the current year, he has paid a gross amount of £15,000 into his SIPP and has also accrued £25,000 worth of defined benefit input. The £25,000 will be tested against the
   1. standard annual allowance.
   2. money purchase annual allowance.
   3. tapered annual allowance.
   4. alternative annual allowance.

5. For someone in a defined benefit (DB) scheme who reaches State pension age after 6 April 2016, what will happen to any contracted-out entitlement built up before that date?
   1. It is treated the same as the member’s ordinary rights under the DB scheme.
   2. A ‘rebate derived amount’ would have been applied to the starting amount.
   3. There will be changes to requisite benefits once the State pension is received.
   4. It remains as it was prior to the end of contracting out with the associated rights and employer obligations unchanged.

Answers

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

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

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

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

5. B – See R04 Study Text, Chp 5
   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.