8/2 Quiz: Employer-sponsored Retirement

Which of the following is not a nonqualified retirement plan?

401(k) plans are qualified retirement plans. The correct answer is: 401(k)

Which of the following is not a defined contribution plan? a. 401(k) b. Group deferred annuity c. CODA d. Money-purchase pension plan

A group deferred annuity is a defined benefit plan. The correct answer is: Group deferred annuity

All of the following are defined contribution plans, EXCEPT: ect one: a. CODA. b. 401(k). c. Money-purchase pension plan. d. Group deferred annuity.

A group deferred annuity is a defined benefit plan. The correct answer is: Group deferred annuity.

Which of the following retirement plans is qualified?

A 401(k) plan is a qualified retirement plan. Personal annuities, deferred compensation and split-dollar plans are nonqualified. The correct answer is: 401(k)

What qualified retirement plan is a combination of an IRA and profit sharing plan, permitting the employer to tax-deduct up to 25% of contributions made to employees?

A SEP is available to small employers. Contributions made to employees are deductible up to 25%. The correct answer is: SEP

What qualified retirement plan is a combination of an IRA and profit sharing plan, permitting the employer to tax-deduct up to 25% of contributions made to employees? a. SEP b. 403(b) c. Deferred compensation d. Keogh

A SEP is available to small employers. Contributions made to employees are deductible up to 25%. The correct answer is: SEP

A qualified plan that is a combination of a defined contribution and defined benefit plan, in which a set contribution amount is made is called a:

A target benefit pension plan is a combination of a defined contribution plan and a defined benefit plan. Contributions are made as in money-purchase pension plans, but a target benefit amount is identified. This target benefit is a goal and is not always attained. The correct answer is: Target benefit pension plan

All of the following are defined contribution plans, EXCEPT: a. Individual annuity b. Money-purchase plan c. Pension plan d. Profit-sharing plan

Individual annuities are used to fund defined benefit plans. The correct answer is: Individual annuity

What qualified plan resembles a profit-sharing plan, in which the employer establishes a trust fund and uses cash or new shares of stock to purchase existing shares? a. Keogh b. ESOP c. SIMPLE d. SEP

Employee stock ownership plans (ESOPs) are employee benefit plans. ESOPs are similar to profit-sharing plans. Here's how an ESOP works: the employer establishes a trust fund, and uses cash or new shares of its stock to purchase existing shares. The correct answer is: ESOP

In which qualified plan does the employer contribute a fixed amount to the plan every year, apportioned among each plan participant's account?

In a money-purchase pension plan, the employer contributes a fixed amount to the plan every year, and this amount is apportioned among each participant's account. Upon retirement, participants' benefit amounts are based on the funds in their accounts. The correct answer is: Money-purchase pension plan

Which of the following qualified plans distributes profits to participants?

In a profit-sharing plan, company profits are distributed to plan participants. The correct answer is: Profit-sharing plan

How much is the maximum annual benefit for a defined benefit plan? a. $50,000 b. $80,000 c. $220,000 d. $250,000

which of the following is not a nonqualified retirement plan?

which of the following is NOT a nonqualified retirement plan? Select one: a. Split-dollar b. 401(k) c. Key person insurance d. Deferred compensation

401(k) plans are qualified retirement plans. The correct answer is: 401(k)

A common retirement plan for nonprofit organizations is a:

403(b) plans are tax-sheltered annuities for nonprofit organizations. The correct answer is: 403(b)

Which of the following is a retirement plan for nonprofit organizations?

403(b) plans are tax-sheltered annuities for nonprofit organizations. The correct answer is: 403(b)

What retirement plan blends an IRA with a profit-sharing plan and allows the employer to deduct up to 25% of contributions made to all employees? What retirement plan blends an IRA with a profit-sharing plan and allows the employer to deduct up to 25% of contributions made to all employees? Select one: a. 401(k) b. Keogh c. SIMPLE d. SEP

A SEP is available to small employers. Contributions made to employees are deductible up to 25%. The correct answer is: SEP

All of the following are defined contribution plans, EXCEPT:

A group deferred annuity is a defined benefit plan. The correct answer is: Group deferred annuity

Which qualified plan is a combination of a defined contribution and defined benefit plan, in which a set contribution amount is made? elect one: a. Tax-sheltered annuity b. 401(k) c. Money-purchase pension plan d. Target benefit pension plan

A target benefit pension plan is a combination of a defined contribution plan and a defined benefit plan. Contributions are made as in money-purchase pension plans, but a target benefit amount is identified. This target benefit is a goal and is not always attained. The correct answer is: Target benefit pension plan

Which of the following is a modified profit-sharing or pension plan where part of the participant's compensation is deferred by putting it into the plan via pre-tax cash bonus or pre-tax reduced salary?

Cash or Deferred Arrangement (CODA) plans are modified profit-sharing or pension plans (401(k) and 403(b) are CODA plans). These plans are termed CODA because part of the participant's compensation is deferred by putting it into the plan. There are two ways to defer compensation: 1.) a cash bonus is put into the participant's account on a pre-tax basis, or 2.) the participant takes a reduced salary, and the amount of the reduction is put into the plan on a pre-tax basis. The correct answer is: All of the above

Which of the following is a CODA plan?

Cash or Deferred Arrangement (CODA) plans are modified profit-sharing or pension plans. These are 401(k) and 403(b) plans. The correct answer is: 401(k)

All of the following are CODA plans, EXCEPT:

Cash or deferred arrangement (CODA) plans include: 401(k), 403(b) and tax-sheltered annuities. A money-purchase pension plan is a type of defined contribution plan. The correct answer is: Money-purchase pension plan

All of the following are defined contribution plans, EXCEPT:

Deferred annuities are used to fund defined benefit plans. The correct answer is: Deferred annuity

What is the 50/40 rule when in reference to individual and group deferred annuities?

Defined benefit plans must cover 50 eligible employees, or 40% of all employees, with at least two participants. The correct answer is: Defined benefit plans must cover 50 eligible employees, or 40% of all employees, with at least two participants.

Which of the following qualified plans uses employer contributions to a pension plan based on the employee's compensation and years of service with the company?

In a pension plan, employer contributions to a pension plan are based on the employee's compensation and years of service with the company, not the company's profitability or the employer's preference. Money-purchase and target benefit are types of pension plans. The correct answer is: All of the above

Which of the following qualified plans uses employer contributions to a pension plan based on the employee's compensation and years of service with the company? Which of the following qualified plans uses employer contributions to a pension plan based on the employee's compensation and years of service with the company? Select one: a. Pension plan b. Target benefit pension plan c. Money-purchase pension plan d. All of the above

In a pension plan, employer contributions to a pension plan are based on the employee's compensation and years of service with the company, not the company's profitability or the employer's preference. Money-purchase and target benefit are types of pension plans. The correct answer is: All of the above

All of the following are defined contribution plans, EXCEPT:

Individual annuities are used to fund defined benefit plans. The correct answer is: Individual annuity

A 403(b) plan may be offered by a:

Nonprofit organizations, such as churches and public schools, may provide a 403(b) plan to their employees. The correct answer is: Public school

Which of the following is an entity that may offer a 403(b) plan?

Nonprofit organizations, such as public schools and churches, may provide a 403(b) plan to their employees. The correct answer is: A church

The two primary types of qualified retirement plans are:

Qualified retirement plans are grouped into two primary categories: defined benefit plans and defined contribution plans. The correct answer is: Defined benefit and defined contribution

Qualified retirement plans are grouped into two general categories called:

Qualified retirement plans are grouped into two primary categories: defined benefit plans and defined contribution plans. The correct answer is: Defined benefit plans and defined contribution plans

What are the two general categories of qualified retirement plans?

Qualified retirement plans are grouped into two primary categories: defined benefit plans and defined contribution plans. The correct answer is: Defined benefit plans and defined contribution plans

What are the two general categories of qualified retirement plans? Select one: a. Annuities and life insurance b. Keogh plans and IRAs c. 401(k) plans and 403(b) plans d. Defined benefit plans and defined contribution plans

Qualified retirement plans are grouped into two primary categories: defined benefit plans and defined contribution plans. The correct answer is: Defined benefit plans and defined contribution plans

Which of the following is a retirement plan for employers with 100 or fewer employees?

SIMPLE plans are designed for employers with 100 or fewer employees. The correct answer is: SIMPLE

Which of the following is a qualified plan that is a combination of an IRA and a profit-sharing plan for small employers?

Simplified Employee Pension (SEP) plans, or 408(k) plans, are qualified plans for small employers. SEPs are a mix of an IRA and a profit-sharing plan. The correct answer is: 408(k)

A 408(k) is what type of qualified plan?

Simplified Employee Pension (SEP) plans, or 408(k) plans, are qualified plans for small employers. SEPs are a mix of an IRA and a profit-sharing plan. The correct answer is: SEP

How much is the maximum annual benefit for a defined benefit plan?

The maximum annual benefit for defined benefit plans is $210,000. The correct answer is: $210,000

How much is the maximum contribution for a defined contribution plan in 2015?

The maximum annual contribution under a defined contribution plan is $53,000 in 2015. The correct answer is: $53,000

An individual age 49 and below can contribute what maximum amount to a 403(b) plan?

The maximum contribution to a 403(b) plan for individuals age 49 and below is $18,500. The correct answer is: $18,500

An individual age 49 and below can contribute what maximum amount to a 403(b) plan? Select one: a. $18,500 b. $22,000 c. $35,000 d. $49,000

The maximum contribution to a 403(b) plan for individuals age 49 and below is $18,500. The correct answer is: $18,500

The most common funding tool used for defined benefit plans is:

The most common funding tool used for defined benefit plans is an individual or group deferred annuity. The correct answer is: Both of the above

What nonqualified deferred compensation plan is intended for government employees?

The section 457 plan is a nonqualified deferred compensation plan for employees of the government and nonprofit organizations. The correct answer is: Section 457 plan

What are the two primary types of qualified plans?

The two primary types of qualified plans are defined benefit and defined contribution plans. The correct answer is: Defined benefit plans and defined contribution plans