R04 DC benefits, leaving and transfers: free practice questions

1. Question 1 of 5

   An employee in a GPP keeps working past the scheme's selected pension age. What happens to the employer's contributions?

   Option A: They must continue while the member is employedOption B: They can stop once the member is 66Option C: They can stop at the scheme's selected ageOption D: They are converted into salary

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   The answer is A: They must continue while the member is employed

   The employer can't force benefits to be taken at the selected age and must keep contributing while the member stays in employment.

   Why the other options are wrong

   B

   There's no age 66 cut-off.

   C

   The selected age doesn't end contributions.

   D

   They aren't converted to salary.

2. Question 2 of 5

   Is tax relief available on personal contributions to stand-alone pension term assurance today?

   Option A: Yes, at the member's marginal rateOption B: No, except for some old policies from 2006/07Option C: Yes, but only at basic rateOption D: Only for the self-employed, at their marginal rate

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   The answer is B: No, except for some old policies from 2006/07

   Relief was removed for policies applied for after 13 December 2006 (or taken out after 5 April 2007). Employer payments can still get relief.

   Why the other options are wrong

   A

   Relief isn't generally available.

   C

   There's no basic rate exception.

   D

   There's no self-employed exception.

3. Question 3 of 5

   Which pots are expected to be automatically consolidated under the Pension Schemes Act 2026?

   Option A: Any pot with no contribution for five yearsOption B: All DC pots under £10,000Option C: DB benefits under £30,000Option D: DC pots under £1,000, dormant for 12 months or more

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   The answer is D: DC pots under £1,000, dormant for 12 months or more

   Small dormant pots under £1,000 are expected to move to authorised consolidators, though not before 2030.

   Why the other options are wrong

   A

   That isn't the expected rule.

   B

   £10,000 is the small pots lump sum limit.

   C

   DB benefits aren't included.

4. Question 4 of 5

   Why is a fixed cash-to-pension conversion rate in a DC scheme's rules a potential risk to the scheme?

   Option A: It breaches the charge capOption B: It triggers the MPAA for all membersOption C: It removes the member's open market option to buy an annuity elsewhereOption D: It creates a costly guaranteed annuity option against the scheme

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   The answer is D: It creates a costly guaranteed annuity option against the scheme

   Paying scheme pension at a fixed rate shields members from market moves but can become very expensive if annuity costs rise.

   Why the other options are wrong

   A

   It isn't a charge.

   B

   It doesn't trigger the MPAA.

   C

   It doesn't remove member rights to shop around in individual plans.

5. Question 5 of 5

   How can a personal pension member keep their contributions rising over time?

   Option A: Link contributions to the State PensionOption B: Ask HMRC to increase reliefOption C: Rely on the provider's annual bonusOption D: Choose automatic indexation of contributions

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   The answer is D: Choose automatic indexation of contributions

   Members choose their own contribution level and can index it to rise each year by a fixed rate or an index such as RPI.

   Why the other options are wrong

   A

   There's no State Pension link.

   B

   HMRC doesn't increase relief on request.

   C

   Bonuses don't change contributions.

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