10 exam-style questions with answers and explanations, straight from our 1,030-question bank. Tap an answer to check yourself. When you're ready, take the scored version in the free practice test.
These 10 free CPC questions are organized by exam domain, so you can see how each part of the Certified Pension Consultant blueprint is tested. Reveal the answer and explanation under each question.
Domain 1: Business entities and related groups 10% of exam
Question 1
A management company's entire business is regularly and continuously managing one printing company. It controls the printing company's budgeting, staffing, and daily operations under a services contract. Neither company nor its owners holds any direct or attributed ownership interest in the other. Which relationship can nevertheless require their employees to be treated as employed by one employer for retirement-plan qualification?
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Correct answer: C - A management-function affiliated service group.
Domain 2: Coverage and nondiscrimination 15% of exam
Question 2
A profit-sharing plan's 2026 census lists 8 nonexcludable highly compensated employees (HCEs), of whom 6 receive an allocation. It also lists 48 nonhighly compensated employees (NHCEs), of whom 8 are statutory age-and-service excludables. Of the remaining NHCEs, 22 receive an allocation. No other exclusions apply. An analyst flags a coverage failure because fewer than 70% of the nonexcludable NHCEs benefit. What does the correct ratio-percentage computation show?
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Correct answer: D - Pass; the ratio percentage is 73.33%.
Question 3
For 2026, a DC-only new-comparability plan must satisfy the minimum allocation gateway to test on a benefits basis. The highest HCE nonelective allocation rate is 18%. A nonkey NHCE with $60,000 of compensation receives a 3% safe-harbor nonelective contribution and a 2% employer match. The plan is top-heavy, with a 3% nonkey minimum. All percentages use the same full-year §415 compensation, and the nonelective contribution counts toward both minimums. Before rate-group testing, what additional nonelective allocation is needed for this NHCE to satisfy the gateway and top-heavy minimum?
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Correct answer: D - $1,200
Domain 3: 401(k) plans 15% of exam
Question 4
A traditional 401(k) plan uses current-year ADP testing for 2026. Its four eligible NHCEs have individual tested deferral percentages of 0%, 2%, 5%, and 7%. The HCE ADP is 5.10%, after excluding all qualifying catch-up contributions. The administrator is considering corrective refunds. Which conclusion follows from the ADP test?
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Correct answer: C - Refunds are unnecessary; the maximum HCE ADP is 5.50%.
Domain 4: Defined benefit plans 13% of exam
Question 5
The actuary certifies a single-employer defined benefit plan's adjusted funding target attainment percentage (AFTAP) at 72% for 2026. The employer is not in bankruptcy and will not provide additional funding to lift the benefit restrictions. A retiring participant requests a $240,000 full lump sum; the plan also offers an ordinary monthly life annuity. All other distribution requirements are satisfied. What does this funding status permit?
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Correct answer: A - Begin the monthly life annuity, but do not pay the full lump sum.
Question 6
A cash-balance plan's trust loses 8% during 2026. Its unchanged, legally compliant benefit formula provides a fixed annual interest credit of 5% on each participant's opening hypothetical balance. The CFO asks the administrator to use the trust's actual return on participant statements so that benefit liabilities will fall with the assets. How should the interest credit be handled?
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Correct answer: A - Apply the promised 5% credit; the investment loss affects funding, not that credit.
Domain 5: Distributions and loans 10% of exam
Question 7
A participant requests an additional general-purpose loan from a 401(k) plan that permits multiple loans up to the statutory limits. Her vested account balance is $120,000, including her existing loan. The highest aggregate outstanding loan balance during the preceding 12 months was $40,000; immediately before the new loan, it is $15,000. She has no loans from any other plan of this employer or a related employer, and all other loan requirements are satisfied. What is the maximum additional amount the plan may lend?
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Correct answer: B - $10,000
Domain 6: Fiduciary responsibilities, including ERISA 404(c) 11% of exam
Question 8
Payroll is due this afternoon, and a company's bank has unexpectedly frozen its credit line. The CFO directs the 401(k) trustee to lend the employer $200,000 from the trust for ten days, secured by equipment worth more than the loan and bearing a market interest rate. No statutory or administrative prohibited-transaction exemption applies. Before the wire is released, the trustee should:
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Correct answer: A - Refuse the transfer because it is a prohibited extension of credit.
Domain 7: Correction programs and ethics 8% of exam
Question 9
A 401(k) document expressly includes bonuses in deferral compensation, but payroll has omitted bonuses for two years. The written provision itself satisfies qualification requirements, and the plan is not under IRS examination. The sponsor wants an IRS compliance statement approving the correction rather than relying solely on its own determination. Select the failure classification and correction route that fit this request.
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Correct answer: A - Operational failure; Voluntary Correction Program.
Domain 8: Plan design 18% of exam
Question 10
Two owners, ages 58 and 61, already receive the maximum permissible annual additions in their firm's 401(k)/profit-sharing plan. The business has stable surplus cash, and the owners accept recurring funding obligations and additional employee costs. They want substantially larger qualified retirement benefits, presented to employees as account balances. Which proposal best fits these objectives?
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Correct answer: B - Add a cash-balance plan, coordinating its funding and testing with the existing plan.
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