Retirement Plans

Which of the following statements regarding qualified retirement plans are TRUE?

1. Contributions are made with pretax dollars 2. Distributions are 100% taxable

Which of the following retirement plans is NOT legally required to establish vesting, funding, and eligibility requirements?

A Payroll Deduction Plan * is a retirement plan not subject to eligibility, vesting, or funding standards as required by ERISA plans. A payroll deduction plan is a nonqualified retirement plan. Profit-sharing, pension, and Keogh plans must have established standards.

A nonqualified deferred compensation plan:

Does NOT guarantee the employer will fulfill the obligation *Nonqualified deferred compensation plans are agreements between an employer and an employee in which the employee agrees to defer receipt of part of their salary. Nonqualified deferred compensation plans do not require IRS approval and may discriminate (need not be offered to all employees). In fact, they are generally offered only to officers and other high-ranking executives. In the event of a business failure, there is no guarantee that deferred amounts will be paid.

Which of the following is an example of a qualified retirement plan?

Qualified-Defined Benefit,Keogh Plan,PSP Nonqualified- Deferred Compensation (IRS approval is not required to initiate)