10 - Retirement Plans

SIMPLE plans are available for businesses that employ no more than how many employees?

100

Which of the following phrases best describes vesting?

The employee's right to funds or benefits, contributed by the employer, should the employee leave that employer.

Which of the following statements regarding Roth IRA's is correct?

There is no income tax deduction for contributions

The special class of retirement plan available to employees of certain charitable, educational, or religious organizations is referred to as

a tax-sheltered annuity

ESOPs are typically invested in

employer stock

Which of the following would be eligible for an IRC Section 457 Plan?

Mayor of a small town

All of these are basic requirements for a defined benefit plan EXCEPT

Must provide death and disability benefits

How are Roth IRA's treated for tax purposes?

Non-deductible contributions and tax-free distributions

Retirement plans are prevented from favoring highly compensated employees under which government regulation?

Nondiscrimination

What type of retirement plan meets federal requirements and receives favorable tax treatment

Qualified

Salary Reduction SEP plans (SARSEP's) are reserved for small employers with up to how many employees?

25

Which type of employer retirement plan involves a tax-sheltered annuity?

403(b) plan

All of the following statements about SIMPLE plans are correct EXCEPT

An employer must make dollar for dollar contributions up to 10% of the employee's compensation

What area of group health insurance is regulated under the Employee Retirement Security Act of 1974 (ERISA)?

Disclosure and reporting

Which of the following statements correctly describes the tax advantage of a qualified retirement plan?

Earnings of the plan are taxable to the employee only when the employee receives benefits.

What does ESOP stand for?

Employee Stock Ownership Plan

All of the following employed persons who have no employer-sponsored retirement plan would be eligible to set up and contribute to a traditional IRA EXCEPT

Edna, age 72, nurse

Which law protects the rights of workers covered under an employer-sponsored pension plan?

Employee Retirement Income Security Act (ERISA)

To comply with ERISA minimum participation standards, qualified retirement plans must allow the enrollment of all employees

over age 21 with one year service