DB Pension Plan Benefits

KNOWLEDGE EXPECTED OF: QAFP^® Professionals

Highest Knowledge Level: Evaluation

Knowledge Levels and Associated Verbs

Awareness The state of being aware that something exists / to have familiarity with a particular activity or subject		Understanding To comprehend the general relationship of particulars / to have an expertise with how something works	Application Ability to put information to use / to use knowledge for relevant, practical purposes					Evaluation To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
Define To state exactly the meaning of	Identify To be aware of / to recognize and correctly name / to locate an appropriate resource	Explain To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it	Determine To ascertain / to come to a decision, such as by investigation or reasoning	Compare To note the similarities and differences between two or more things	Estimate To determine an approximate value for	Calculate To find the value using mathematics	Convert To change from one form or purpose to another	Evaluate To reach a conclusion or make a through careful study	Interpret To give the meaning of / to construe or understand / to translate orally

Hold cursor over or click on each term to read its definition.

Identify factors that influence the pension benefit amount for a defined benefit pension plan member, such as:

Member’s length of pensionable service
Member’s contributions to plan
Employer’s funding of plan

Identify factors used to determine the normal retirement date for a defined benefit pension plan member, such as:

Member’s age
Length of pensionable service
Member’s age plus years of pensionable service

Identify the events that may precipitate an early retirement, such as:

Voluntary choice
Satisfying the pension factor for an unreduced pension
Permanent disability
Termination of employment

Explain the types of benefit formulas for determining the pension income payable to a defined benefit pension plan member, such as:

Final earnings
Best average
Career average
Flat benefit

Estimate the projected pension benefit for a defined benefit pension plan member.

Estimate the projected survivor benefit for a defined benefit pension plan.

Estimate the tax impact of receiving a pension benefit from a defined benefit pension plan.

Identify that the employer retains the responsibility for ensuring the pension plan is fully funded.

Explain the pension benefit options that may be available to a defined benefit pension plan member.

Life income
Life income with a guarantee period
Joint and survivor pension
Joint and survivor pension with a guarantee period

Explain the relationship between defined benefit pension plan member benefits, survivor benefits and guarantee periods.

As survivor benefits are increased
As survivor benefits are decreased
As guarantee periods are increased in length
As guarantee periods are decreased in length

Identify that a spouse† may waive their right to survivor pension benefits.

Explain the ancillary benefits that a defined benefit pension plan member may receive, according to the Financial Services Commission of Ontario (FSCO),¹^,† such as:

Bridging benefits
Temporary supplemental benefits
Disability benefits
Death benefits
Early retirement options and benefits
Postponed retirement options

Determine how each of these factors may impact the decision to commence receiving a pension benefit from a defined benefit pension plan:

Life expectancy
Cash flow needs
Impact on government benefits
Tax impact

Evaluate the factors to consider that may impact the decision to commence receiving a pension benefit from a defined benefit pension plan.

† “Spouse” includes common-law partners in jurisdictions that recognize common-law partners under applicable pension legislation. †† While the FSCO website provides information related to pension plans in Ontario, the information referenced here applies across Canada.

REFERENCES

¹ https://www.fsco.gov.on.ca/en/pensions/pension-plan-guide/pages/HRPPW-Types-of-Registered-Pension-Plans-and-Benefits.html

KNOWLEDGE EXPECTED OF: CFP^® Professionals

Highest Knowledge Level: Evaluation

Knowledge Levels and Associated Verbs

Awareness The state of being aware that something exists / to have familiarity with a particular activity or subject		Understanding To comprehend the general relationship of particulars / to have an expertise with how something works	Application Ability to put information to use / to use knowledge for relevant, practical purposes					Evaluation To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
Define To state exactly the meaning of	Identify To be aware of / to recognize and correctly name / to locate an appropriate resource	Explain To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it	Determine To ascertain / to come to a decision, such as by investigation or reasoning	Compare To note the similarities and differences between two or more things	Estimate To determine an approximate value for	Calculate To find the value using mathematics	Convert To change from one form or purpose to another	Evaluate To reach a conclusion or make a through careful study	Interpret To give the meaning of / to construe or understand / to translate orally

Hold cursor over or click on each term to read its definition.

Identify factors that influence the pension benefit amount for a defined benefit pension plan member, such as:

Member’s length of pensionable service
Member’s contributions to plan
Employer’s funding of plan

Identify factors used to determine the normal retirement date for a defined benefit pension plan member, such as:

Member’s age
Length of pensionable service
Member’s age plus years of pensionable service

Identify the events that may precipitate an early retirement, such as:

Voluntary choice
Satisfying the pension factor for an unreduced pension
Permanent disability
Termination of employment

Explain the types of benefit formulas for determining the pension income payable to a defined benefit pension plan member, such as:

Final earnings
Best average
Career average
Flat benefit

Estimate the projected pension benefit for a defined benefit pension plan member.

Estimate the projected survivor benefit for a defined benefit pension plan.

Estimate the tax impact of receiving a pension benefit from a defined benefit pension plan.

Identify that the employer retains the responsibility for ensuring the pension plan is fully funded.

Explain the pension benefit options that may be available to a defined benefit pension plan member.

Life income
Life income with a guarantee period
Joint and survivor pension
Joint and survivor pension with a guarantee period

Explain the relationship between defined benefit pension plan member benefits, survivor benefits and guarantee periods.

As survivor benefits are increased
As survivor benefits are decreased
As guarantee periods are increased in length
As guarantee periods are decreased in length

Identify that a spouse† may waive their right to survivor pension benefits.

Explain the ancillary benefits that a defined benefit pension plan member may receive, according to the Financial Services Commission of Ontario (FSCO),¹^,† such as: