CEBS common mistakes
CEBS · Understand the traps and how to avoid them.
Treating HSA, health FSA, and HRA rules as interchangeable features rather than as rules tied to statutory eligibility conditions - e.g., picking an answer that lets an employee open an HSA while covered by a spouse's general-purpose health FSA, or that lets a limited-purpose FSA coexist with an HSA 'because both are consumer-directed accounts.'
Prep material presents the three accounts side by side in one chapter, so candidates memorize a feature list (rollover, portability, contribution source) instead of the gating condition that an HSA requires HDHP enrollment and no disqualifying coverage.
What to do instead
Rebuild a three-column matrix (eligibility trigger / who may contribute / rollover and portability / permitted reimbursements) from memory once a week, then run edge-case drills: spouse's general-purpose FSA, dependent status, Medicare enrollment mid-year, limited-purpose versus post-deductible FSA.
Answering Canadian items with a U.S. statutory framework, or the reverse - for example citing an employer mandate to provide health coverage in a Canadian scenario, applying ERISA fiduciary language to a provincial plan, or missing that Quebec operates QPIP/QPP rather than the federal EI/CPP programs.
Domain 1 deliberately pairs the U.S. and Canadian content, and question stems about 'the plan sponsor's obligations' read almost identically across jurisdictions, so the candidate answers from whichever framework they studied most recently.
What to do instead
Before reading the answer options, write one word on scratch paper: US-federal, US-state, CA-federal, or CA-provincial. Keep two separate single-page reference sheets and never let a term from one appear on the other; re-drill the Quebec and federal-jurisdiction exceptions weekly.
Making COBRA date errors by anchoring the 60-day election window to the wrong event (the qualifying event date or the employer's notice) instead of the later of the qualifying event or the date coverage actually ends, and by conflating the employer's 30-day notice obligation with the plan administrator's 14-day notice obligation.
Candidates remember the number '60 days' without storing the trigger, and the two notices are covered in the same paragraph, so the numbers get attached to the wrong actor under time pressure.
What to do instead
Draw the timeline once from scratch and label every clock with its trigger event and its responsible party. Then work ten date problems where the coverage-loss date differs from the event date, and check each answer against the drawn timeline rather than memory.
Treating 'named fiduciary' and 'functional fiduciary' as synonyms, and classifying plan-design decisions as fiduciary acts - e.g., labeling a decision to add or cut a benefit as a fiduciary act subject to ERISA's prudence standard, or assuming only the person formally designated in the plan document can be a fiduciary.
The fiduciary chapter uses overlapping vocabulary, and exam items describe duties in job-description language that does not announce which category applies.
What to do instead
Apply two explicit tests to every described duty: (1) does the person exercise discretion or control over plan management or plan assets, and (2) is the act a settlor decision about plan structure versus an administrative act? Classify twenty short duty descriptions and justify each in one sentence.
On strategy-worded items, selecting the option that is technically compliant or actuarially tidy but does not serve the sponsor's stated objective - for instance recommending a plan change solely because it removes a compliance risk, when the stem asks how to improve workforce alignment or contain trend within a stated budget.
Candidates with strong technical preparation default to the compliance reflex, and distractors are written to be individually true statements, so the technically correct option feels safest.
What to do instead
Read the stem twice for two things before touching the options: who is asking (CFO, HR head, trustee) and what decision they face. Eliminate any option that is true but does not move the stated objective, even if it is the most defensible technical statement on the page.
Recommending a redesign without establishing a baseline, or mixing up cost metrics - using PMPM where the question asks per-employee-per-year, or reporting a trend rate when the item asks for the change in unit cost versus the change in total spend driven by enrollment mix.
Metric definitions are absorbed passively from chapters and never computed, so the labels blur under exam pressure and the candidate reasons qualitatively instead of with units.
What to do instead
Memorize each metric with its denominator attached (PMPM = per member per month; PEPY = per employee per year) and practice decomposing a total cost change into unit-cost trend, utilization, and enrollment-mix components using three or four worked numbers.
Using defined benefit funding and accounting terms interchangeably - treating the minimum required contribution as the maximum deductible contribution, confusing funded status on an accounting basis with the funding target, or mixing the PBGC flat-rate premium with the variable-rate premium and its underfunding trigger.
Several distinct calculations each answer a differently worded question ('how much must be contributed,' 'how much may be deducted,' 'what premium is owed'), and the exam reuses the same plan facts across variants so the candidate reuses the same answer.
What to do instead
Build a table with columns for who pays, how much, by when, and what happens if missed; populate one row each for minimum required, maximum deductible, PBGC flat rate, and PBGC variable rate. Re-derive the rows from the definitions rather than reciting figures.
Conflating the elective deferral limit with the annual additions limit - applying the 402(g) cap to total employer plus employee contributions, applying the 415(c) limit to salary deferrals alone, or testing against the wrong limitation year - and mishandling how excess deferrals and ADP/ACP refunds are taxed and distributed.
Both limits are dollar figures applied to the same participant in the same year, and study guides list them adjacently, so the labels swap.
What to do instead
Keep a one-page limit map keyed to the question 'who contributes, what does it cap, which year does it attach to,' and run ten short calculation items where deferrals, match, and nonelective contributions are combined, checking which cap bites first.
Missing penalties and taxation on distributions - overlooking an early-distribution penalty exception, computing a required minimum distribution from the wrong account balance or using the wrong table, treating a rollover of after-tax amounts as fully taxable, or mishandling a QDRO alternate payee's tax treatment.
Distribution rules sit at the intersection of tax, plan qualification, and domestic relations, and candidates study the eligibility rules but skim the tax consequences, so exceptions are half-remembered.
What to do instead
Build a distribution timeline (event, permissible timing, mandatory timing, tax and penalty) plus a separate list of penalty exceptions. Classify fifteen fact patterns as taxable, penalty-exposed, or rollover-eligible, and justify each classification in one line.
In Canadian retirement scenarios, treating RRSP, TFSA, and registered pension plan room as fungible - ignoring the pension adjustment that reduces RRSP room, assuming TFSA contributions are deductible, or applying unlocked RRSP withdrawal rules to a locked-in plan.
The three vehicles share a contribution-limit vocabulary, and exam items often give the sponsor's plan facts without restating which vehicle the member is using.
What to do instead
Write a comparison table (deductible in / taxed out, room carry-forward, effect of plan membership, locking rules) and drill items that require recomputing RRSP room after a pension adjustment before any contribution question is answered.