Friday Five Focus on Pensions – 26 August – 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 2021/22, examinable by the CII until 31 August 2022. They do not relate to tax year 2022/23 which is only examinable by the CII from 1 September 2022.

1. Before a complaint can be sent to the Financial Ombudsman Service, the provider must first investigate and respond to the complainant within how many weeks?
   1. 8
   2. 6
   3. 4
   4. 2

2. Helen retired some years ago and now permanently lives overseas. Her State pension is NOT increased each April which would suggest she:
   1. has an insufficient National Insurance contribution record.
   2. has a Category B pension.
   3. lives in a country with no reciprocal social security agreement with the UK.
   4. commuted the increases for a tax-free lump sum.

3. Philippe is considering transferring out of his defined benefit pension scheme. He should be aware that this will normally mean giving up: Tick all that apply.
   1. a lump sum death benefit based on a multiple of salary.
   2. a pension based on a percentage of salary.
   3. a guaranteed income for life.
   4. the prospect of investment growth.

4. Having opted for flexi-access drawdown your client will draw income which is paid:
   1. as earned income via PAYE.
   2. tax-free.
   3. gross but taxable via self-assessment.
   4. as part capital (tax free) and part interest (taxable)

5. A small, self-administered scheme (SSAS) is considering making a loan to its sponsoring employer. The scheme administrator should be aware that HMRC require that the loan: Tick all that apply.
   1. is no more than 50% of the net value of the scheme assets, excluding any monies transferred in to the SSAS from previous pension arrangements.
   2. is secured as a first charge.
   3. is repaid in equal instalments over a five-year period.
   4. can be rolled over for a further period (not exceeding five years) if the sponsoring employer has financial difficulties.

Answers

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

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

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

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

5. BCD – See R04 Study Text, Chp 10
   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.