Friday Five Focus on Pensions – 5 Questions in 5 Minutes – 15 May 2026

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 2025/26, examinable by the CII until 31 August 2026. They do not relate to tax year 2026/27 which is only examinable by the CII from 1 September 2026.

1. Wayne’s adviser has recommended that he take out a stakeholder pension. When doing so, Wayne should be aware that the
   1. scheme must be registered with the Pensions Ombudsman.
   2. Pensions Regulator is responsible for registration compliance.
   3. ABI regulates the marketing of schemes.
   4. Pensions Regulator supervises the fund manager.

2. Which type of pension arrangement will always provide benefits via a scheme pension?
   1. A Retirement Annuity Contract.
   2. A defined benefit pension scheme.
   3. A Small Self-Administered Scheme.
   4. A defined contribution occupational scheme.

3. Evelyn wishes to make a complaint against her former employer in relation to incorrect administration of the occupational pension scheme. Who should she complain to?
   1. The Pensions Advisory Service.
   2. The Pensions Ombudsman.
   3. The Pensions Regulator.
   4. The Financial Ombudsman Service.

4. Edward, aged 20, has been advised that he is the beneficiary of his father Paul’s scheme pension following Paul’s death at the age of 56. What type of benefit would Edward not potentially be entitled to from the scheme?
   1. dependents flexi-access drawdown.
   2. A dependents scheme pension.
   3. payments under a guarantee period.
   4. a lump sum death benefit.

5. Sally was in capped drawdown on 5 April 2015. She took the maximum PCLS from a fund that was worth £385,000. Sally’s government actuarial department (GAD) rate is £53 per £1,000, what is the maximum income Sally is entitled to?
   1. £15,304
   2. £18,365
   3. £22,956
   4. £30,608

Answers

1. B; See R04 Study Text, Chp 6; Rationale: The Pensions Regulator is responsible for Stakeholder pension registration compliance. The FCA is responsible for the marketing compliance and supervising the firms that manage the funds.
2. B; See R04 Study Text, Chp 3; Rationale: An occupational defined benefit scheme will always provide benefits via a scheme pension. Small self-administered schemes are classed as occupational schemes and could provide scheme pensions but do not always (the same applies to occupational defined contribution schemes). Retirement annuity contracts were the forerunners to personal pensions; they do not provide scheme pensions.
3. B; See R04 Study Text, Chp 4; Rationale: The Pensions Ombudsman would deal with complaints from individuals regarding their occupational pension schemes. The Financial Ombudsman does deal with complaints from individuals but not in relation to occupational pension schemes.
4. A; See R04 Study Text, Chp 7; Rationale: A dependent’s flexi-access drawdown pension can only be paid from a defined contribution arrangement. The rest are all potential options from a scheme pension.
5. C; See R04 Study Text, Chp 8; Rationale: Sally has taken the maximum PCLS (25% of her fund); therefore, her remaining fund invested into pension drawdown is £385,000 x 75% = £288,750. If Sally’s GAD rate is £53 per £1,000, applied to her fund this equates to £288,750/£1,000 x £53 = £15,303.75. The maximum income she can take in capped drawdown is 150% of GAD = £15,303.75 x 150% = £22,956 (rounded up).

Grab the resources you need!

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