Alison's AMRF is valued at €70,000 on the 1st July 2020. What is the MAXIMUM withdrawal Alison could take from her AMRF at that date, assuming she has not taken any previous withdrawal from her AMRF in 2020?

Unlock all questions

This demo includes only 20 questions. Upgrade to access hundreds of questions, flashcards, exam simulations, and disable ads.

Full question bankExam simulationsFlashcards
From $25.99Unlock all

Prepare for the QFA Pensions Exam 1. Use flashcards and multiple choice questions with detailed explanations. Secure your success with our comprehensive study tools!

Multiple Choice

Alison's AMRF is valued at €70,000 on the 1st July 2020. What is the MAXIMUM withdrawal Alison could take from her AMRF at that date, assuming she has not taken any previous withdrawal from her AMRF in 2020?

Explanation:
The key idea is that an AMRF allows a maximum annual withdrawal of 4% of its current value. Here, the AMRF is €70,000, and no withdrawal has been taken yet this year, so the full 4% applies: 0.04 × €70,000 = €2,800. The other options would require withdrawing more than 4% of the fund, which isn’t permitted. This rule helps balance providing retirement income with preserving the fund for the future.

The key idea is that an AMRF allows a maximum annual withdrawal of 4% of its current value. Here, the AMRF is €70,000, and no withdrawal has been taken yet this year, so the full 4% applies: 0.04 × €70,000 = €2,800. The other options would require withdrawing more than 4% of the fund, which isn’t permitted. This rule helps balance providing retirement income with preserving the fund for the future.

More Multiple Choice Questions
Subscribe

Get the latest from Passetra

You can unsubscribe at any time. Read our privacy policy