Pensions World SA CPD Assessment Q4 2021

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Welcome to the Pensions World SA CPD Portal!

Please read the tutorial before completing the assessment questions below.

Trustee Tutor: Issue 8 – Understanding risk in retirement funds

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Name

Surname

SA ID Number

Company Name

FPI Memberhip Number (if available, otherwise type "no number")

Contact number

Email address

E-mail address

ASSESSMENT FORM

1. Managing risk in retirement funds is dealt with in:

a. Regulation 28 of the Pension Funds Act

b. Principle 7 of PF circular 130

c. Principle 11 of the King IV Report

d. All of the above.

2. The purpose of Regulation 28 is to protect members from an inappropriate level of risk in their retirement fund investments

a. True

b. False

3. Which of the following statements is correct?

a. Capital risk is the risk that you will not have sufficient capital saved when you retire.

b. Inflation risk is the risk that your investment fees will grow at a rate greater than inflation

c. Market timing risk is the risk that an investor assumes by investing a set amount on the same day every month

d. Liquidity risk is the risk that an investment can’t be sold quickly enough to meet financial obligations or liabilities.

4. Which of the following definitions is incorrect?

A real return is the return earned by an investment after taking inflation into account.

b. Systematic risk is the risk of the global investment system.

c. Risk is the possibility of something bad happening.

d. Volatility is the movement of an investment’s returns compared to its average over a period of time.

5. Which of the following is the most common measure of investment risk?

a. Standard deviation

b. Sortina ratio

c. Sharpe ratio

d. Beta

6. Which of the following statements is correct when referring to managing investment risk in a retirement fund?

a. Trustees should invest in one asset class in order not to dilute performance.

b. The most common market sectors are equities, bonds and cash.

c. Retirement funds may invest in many geographical locations encompassing South Africa, Africa and offshore.

d. Investment managers in South Africa all have access to the same index of shares and thus are highly correlated in terms of performance.

7. Which of the following statements is correct.

Governance risks in retirement funds may be classified as:

a. Reputational, administrative and social.

b. Administrative, financial and actuarial.

c. Contractual, insurance and compliance.

d. Management of the fund, operational and financial.

8. According to PF 130, each retirement fund needs to have a risk management policy, which must include the communication to fund members and stakeholders on what the fund’s risks are and how they are managed.

a. True

b. False

9. How many best practice principles does IOPS set out in their general good practices for risk management?

a. 6

b. 7

c. 8

d. 9

10. Which of the following is incorrect – Risks can be rated as:

a. Low

b. Moderate

c. High

d. Crucial

Thank you for completing the assessment. Once you click on the "Submit Assessment" button below, your answers will be sent for verification and scoring.

You will hereafter receive an email containing your answers submitted and the score attained.

A CPD Certificate will then be issued a day or two later (following verification) and be emailed to the address supplied in this form.

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