CIMA Exam CIMAPRA19-F01-1 Topic 1 Question 110 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam

Question #: 110
Topic #: 1

Which of the following is a characteristic of a defined contribution post-employment benefit scheme?

AThe amount of the post-employment benefits paid to former employees depends on how well the scheme's investments have performed.

BThe employer would make additional contributions into the scheme if the actuary predicted a shortfall in the funds available to pay post-employment benefits.

CThe amount of the post-employment benefits paid to former employees is determined at the date of their retirement using a predefined formula.

DThe employer may take a contributions holiday and stop paying contributions for a period, if the scheme's assets appear to be more than are required to meet the scheme's obligations.

Show Suggested Answer

Suggested Answer: A

by Susy at Apr 07, 2025, 04:59 AM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F01-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Loise

4 days ago

B seems like the most logical choice to me. The employer has to step in if the funds are insufficient. I'd rather not depend on the whims of the stock market, thank you very much.

upvoted 0 times

...

Patria

4 days ago

Ha! D is clearly the funniest option. The employer can just take a 'contributions holiday' if the assets are sufficient. Like a paid vacation, but for the company!

upvoted 0 times

...

Avery

8 days ago

C is the answer, no doubt about it. The benefits are determined by a predefined formula, not investment performance. This exam is a piece of cake!

upvoted 0 times

...

Ryann

13 days ago

That's a valid point, but I still think A) is more likely based on the characteristics of defined contribution schemes.

upvoted 0 times

...

Pete

13 days ago

I disagree, I believe the answer is C) because benefits should be predetermined.

upvoted 0 times

...

Ryann

17 days ago

I think the answer is A) because it makes sense for benefits to depend on investments.

upvoted 0 times

...

Charlene

21 days ago

Hmm, I thought option B was the right one. The employer has to cover any shortfall in the funds, not the employees. What a drag!

upvoted 0 times

Denny

2 days ago

User 1: I think option A is correct. The benefits depend on how well the investments perform.

upvoted 0 times

...

Gerald

27 days ago

Option A is the correct answer. The amount of benefits paid depends on the scheme's investment performance, not a predefined formula.

upvoted 0 times

Gwenn

12 hours ago

I think the correct answer is A) The amount of the post-employment benefits paid to former employees depends on how well the scheme's investments have performed.

upvoted 0 times

...