Chapter 6 Exam Review
All of the following apply to defined benefit plans EXCEPT
Contributions are tied to the company profits
For a retirement plan to be qualified, it must be designed for whose benefit?
Employees
Which of the following is TRUE of a qualified plan?
It has a tax benefit for both employer and employee
Which of the following is an IRS qualified retirement program for the self-employed?
Keogh Plan
Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?
SEP's are suitable for large companies
Which of the following applicants would NOT qualify for a Keogh Plan?
Someone who works 400 hours per year
A 403(b) plan, commonly referred to as a TSA, is available to be used by ?
Teachers and not-for-profit organizations
How are contributions to a tax-sheltered annuity treated with regards to taxation?
They are not included as income for the employee, but are taxable upon distribution
Who may contribute to an HR-10 plan?
A self-employed individual
SIMPLE Plans require all of the following EXCEPT
At least 1,000 employees.
Two attorneys operate their practice as a partnership. They want to start a program through their practice that will provide retirement benefits for themselves and three employees. They would likely choose (aka Self-employed)
HR-10 (Keogh Plan)
Which of the following is true about a defined benefit plan?
Higher-salaried employees with only a few years until retirement receive the highest contribution.
Which is INCORRECT concerning a section 457 Deferred Compensation Plan?
It has a vesting requirement
A tax-sheltered annuity is a special tax-favored retirement plan available to _____
Certain groups of employees only
All of the following would be elgible to establish a Keogh retirement plan EXCEPT
The president and employee of a family corporation