Friday Five Focus on Pensions – 4 November – 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.

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

2. Bill is eligible to receive an element of the State Graduated Pension Scheme at retirement. This is because he:
   1. was contracted out of SERPS/S2P.
   2. was self-employed throughout his working life.
   3. retired before 1961.
   4. was employed in 1971.

3. James, aged 29, was nominated by his uncle as the beneficiary of his occupational defined contribution pension scheme upon his death. Which of the following death benefit options will NOT be available to James?
   1. Scheme pension.
   2. Lifetime annuity.
   3. Flexi-access drawdown.
   4. Lump sum.

4. At A-day, Don’s total benefits were valued at £2m and he had entitlement to £600,000 of this in the form of a pension commencement lump sum. Don registered for enhanced protection. Drawing benefits in 2022/23 with an increased fund of £2.6m will provide him with a PCLS of:
   1. £312,500
   2. £600,000
   3. £720,000
   4. £780,000

5. For someone in a defined benefit 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 1
   Grab our taster mock exam paper for CII R04. Click here to download.

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

4. D – See R04 Study Text, Chp 3
   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.