401k

which of the following are tax benefits that may be enjoyed by low and middle income plan participants

- the opportunity to make before tax investments - an income tax credit

which of the following are tax benefits that may be enjoyed by low or middle income 401k participants

- the opportunity to make before tax investments - an income tax credit

under a 2-6 year vesting schedule, a participant must be 20% vested after how many years of service

2

as a general rule, loans from a 401k plan must be repaid within how many years

5

loans from qualified plans must be repaid within how many years?

5

which of the following employees would fall within the definition of a highly compensated employee

5% owner during the current or previous year

under ERISA section 404, plan participants must have the ability to give some investment instructions using which of the following methods

both written and oral communication

401K plans provide employees with a way to accomplish all of the following except

completely eliminate personal income taxes

the risk level of a standard income contract with an insurance company is best described sd

conservative

for purposes of determining whether a 401k distribution is permitted, disability is defined as the inability to engage in any substantial gainful activity due to a medically determinable impairment that can be expected to result in

death or continue for a long indefinite period

which of the following is not an exception to the premature distribution penalty tax

distributions made to purchase a primary residence

three year cliff vesting and graduated 6 year vesting in a 401k plan apply to which of the following

employer matching contributions

in order to be offered as a non-core ( supplemental ) investment alternative for 401k plan investments

employer securities must be publicly traded or on a national exchange or other generally recognized market

Which of the following is not a common core investment option under ERISA 404c

futures contracts

which of the following is not an option to increase 401k participation

giving an across the board pay increase

which of the following statements regarding interest rates on a loan is not correct

interest paid on plan loans is deductible for tax purposes

an employer whose 401k plan complies with ERISA section 404

is placing investment risk with the plan participant

if an employer with a simple plan no longer meets the eligibility requirement

it can only continue to maintain its simple for 2 more years

to ensure that a 401k plan is in compliance with applicable statues and regulations, most plan sponsors request which of the following from the IRS

letter of determination

distributions taken when the plan participant is over 59 1/2 yet under their required beginning date

may be taken without penalty

distributions from a 401k plan must generally begin

no later than the required beginning date or retirement

which of the following qualification requirements is inapplicable to a solo 401k

non-discrimination testing

which of the following statements regarding deferral percentages and employer matching contributions is correct

offering ER matching contributions often motivate lower paid employees to participate in the plan

under ERISA section 404 C, plan participants must be able reallocate plan assets

once every 3 months

which of the following items are taxable to an employee who participates in her employer 401k plan

part of the cost of the life insurance under the plan

the purpose of a closing interview is to

present a 401k proposal and attempt to close the sale

a 401k plan provides the employer will all except

providing benefits for only highly compensated people

which of the following is a tax free transfer of money or property distributed from a 401k plan to another qualified plan or IRA

rollover

ERISA mandates that the persons responsible for administering a 401k plan must file certain reports and disclosure to all of the following except

social security administration

employee contributions to a 401k are subject to

social security tax

which of the following individuals is clearly eligible to make a catch up contribution

someone who is 55 years old

which of the following is not an advantage for employees who participate in a traditional 401k

tax free distributions upon retirement

if an employee is in the 25% tax bracket and offers $5K of income to a 401k plan

that employee's income is reduced by $1250.00

if life insurance is included as one of the investment options under a 401k plan

the cost of the life insurance must be incidental

all of the following are advantages of 401k except

the employer may make unlimited contributions which generate unlimited tax deductions for the business

formal preparation of a plan document is generally the sole responsibility of

the employer's attorney

if a loan from a 401k plan does not meet tax requirements

the loan is considered a plan distribution and is taxed as incoome

which of the following statements regarding the presence of an employer representative at employee group meetings held to introduce a new 401k product is correct

the presence of an employer representative at group meetings may inhibit the tough questions that employees might otherwise ask about the plan

which of the following statements regarding the ratio percentage is correct

the ration percentage test determines the ratio of non-highly compensated people that participate

which of the following must be made available upon request to 401k participants

the value of shares of an investment in the participant's account

which of the following statements regarding loans from a 401k in false

they must be made available to highly compensated in amounts greater then made to other employees

the penalty tax on premature distributions from a 401k plan

would apply to a distribution made in conjunction with separation of service due to early retirement at age 50

which of the following may be a participant disadvantage of a 401k plan

- assumption of investment responsibility - lack of liquidity

which of the following statements regarding loans from 401k plans is correct

- interest paid on a participant's loan from 401k plans are generally not tax deductible

when selecting trustees for trust plans, employers should select

only those trustees with the ability to assume fiduciary responsibilities

in the initial interview, which of the following is not a primary goal

present a 401k plan

amounts distributed from a 401k plan that were not previously taxed

are generally treated as ordinary income

a qualified roth contribution save the after tax money in

a 401k account

a permanent transfer of money or property from a qualified plan to which of the following does not qualify for rollover treatment

a plan participant

in order for a 401k plan to be qualified for tax and regulatory purposes

a written announcement must be made to the employees

a qualified roth contribution program saves

after tax money in a 401k account

which of the following is not required by ERISA plan 404 C

all plan participants must have been employed by the plan sponsor for a minimum of 3 years

which of the following about a simple plan is not correct

amounts deferred to a simple account are subject to current income taxation

which of the following statements regarding elective deferrals for highly compensated is correct

amounts in excess of the maximum allowed under the ADP for highly compensated are considered excess contributions

which of the following have provisions that allow a 401k plan to obtain relief from certain fiduciary rules when a participant incurs financial loss of investment decisions

ERISA 404 c

a 401k plan must be reviewed

annually

matching contributions must vest under

a 3 year cliff or a 6 year graduated schedule