KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals
- Identify the maximum contributions that can be made to a specified pension plan.1
- Identify the contributions made to a specified pension plan for a given plan member.
- Explain how each of the factors may impact the suitability of contributing to a specified pension plan, such as:
- Risk tolerance
- Effect on current cash flow
- Effect on future cash flow (impact on value of future pension benefit)
- Effect on current net worth
- Effect on future net worth
- Fiscal discipline of individual
- Psychological impact from decision
- Impact on pension adjustment
- Expected tax rate at time of receipt of pension benefit
- Impact of future receipt of pension benefits on government benefits
- Evaluate how each of the factors may impact the suitability of contributing to a specified contribution pension plan.
- Explain the impact of a contribution to a specified pension plan on registered retirement savings plan contribution room.
- Explain the tax impact of contributing to a specified pension plan.
- Estimate the tax impact of contributing to a specified pension plan.
Glossary of Verbs (mouse over to see definition)
To state exactly the meaning of
To be aware of / to recognize and correctly name / to locate an appropriate resource
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
To note the similarities and differences between two or more things
To determine an approximate value for
To find the value using mathematics
To change from one form or purpose to another
To reach a conclusion or make a judgement through careful study
To give the meaning of / to construe or understand / to translate orally