Retirement Plan Final - Online Ch 10

Bob works for New Orleans Museum of Art, which sponsors a 403(b) plan. If Bob is 45 years old and has worked at the museum for the last 20 years, what is his maximum elective deferral for 2020? A)$19,500. B)$22,500. C)$26,000. D)$29,000.

A)$19,500.

All of the following statements is/are correct regarding tax-sheltered annuities (403(b) plans) except? 1. The non-age-based catch-up provision is available to employees of all 501(c)(3) organization employers that sponsor a TSA. 2. Active employees who take withdrawals from TSAs prior to 59½ are subject to a 10% penalty tax. 3. TSAs are available to all employees of 501(c)(3) organizations who adopt such a plan. 4. If an employee has had at least 15 years of service with an eligible employer, an additional catch-up contribution may be allowed. A)1 only. B)1 and 2. C)1, 2, and 3. D)2, 3, and 4.

A)1 only.

Which of the following types of 457 plans permit employees to defer recognition of income without any risk of forfeiture?1. Public 457(b) plans.2. 457(f ) plans.3. Private 457(b) plans. A)1 only. B)2 only. C)1 and 3. D)1, 2, and 3.

A)1 only.

Which of the following statements is/are correct regarding TSAs and 457(b) deferred compensation plans?1. Both plans require contracts between an employer and an employee.2. Participation in either a TSA or a 457 plan will cause an individual to be considered an "active participant for purposes of phasing out the deductibility of Traditional IRA contributions.3. Both plans allow a special "final 3-year" catch-up contribution. 4. Both plans must meet minimum distribution requirements that apply to qualified plans. A) 1 only. B) 1 and 4. C) 2, 3, and 4. D) 1, 2, and 4.

B) 1 and 4.

Which of the following is/are correct regarding SIMPLE plans? 1. A SIMPLE plan does not require annual testing. 2. A SIMPLE IRA must follow a 3-year cliff vesting schedule if the plan is top-heavy. 3. A 25% early withdrawal penalty may apply to distributions taken within the first two years of participation in a SIMPLE plan. 4. The maximum elective deferral contribution to a SIMPLE 401(k) plan is $19,500 for 2020 and $26,000 for 2020 for an employee who has attained the age of 50. A)3 only. B)1 and 3. C)1, 2, and 3. D)2, 3, and 4.

B)1 and 3.

What is the maximum catch-up contribution for 2020 under the 457(b) plan "Final 3-Year" rule? A)$3,000. B)$6,500. C)$19,500. D)$26,000.

C)$19,500.

James, age 58, has compensation of $150,000 and wants to defer the maximum to his public 457(b) plan. The normal retirement age for his plan is age 60. How much can he defer in 2020 if he has an unused deferral amount of $60,000 from age 40 to age 49? A)$19,500. B)$26,000. C)$39,000. D)$45,500.

C)$39,000.

Which of the following are permitted investments in a 403(b) TSA (TDA) plan?1. An annuity contract from an insurance company.2. An international gold stock mutual fund.3. A self-directed brokerage account consisting solely of U.S. stocks, bonds and mutual funds. A)1 only. B)2 only. C)1 and 2. D)1, 2, and 3.

C)1 and 2.

Which of the following are correct? 1. SIMPLEs provide incentives to small employers to adopt retirement plans for employees with less administrative costs and fewer set-up procedures than qualified plans. 2. SIMPLE IRAs can permit loans to employees. 3. SIMPLE IRAs require the employer either to match the employee contributions of those who participate or to provide nonelective contributions to all eligible employees. A)3 only. B)1 and 2. C)1 and 3. D)All of the above.

C)1 and 3.

Which term or phrase best completes the following sentence: "Employee contributions in 403(b) plans are ______." A)Never matched. B)Never fully vested. C)Always fully vested. D)Vested based on age and years of service.

C)Always fully vested.

Which of the following plans permit employers to match employee elective deferral contributions or make non-elective contributions? 1. 457(b) plan. 2. 401(k) plan. 3. 403(b) plan. A)2 only. B)3 only. C)2 and 3. D)1, 2, and 3.

D)1, 2, and 3.

Taylor, age 25, works for Swim America. Swim America adopted a SIMPLE plan six months ago. Taylor made an elective deferral contribution to the plan of $8,000, and Swim America made a matching contribution of $2,400. Which of the following statements is/are correct? 1. Taylor can withdraw his entire account balance without terminating employment. 2. Taylor can roll his SIMPLE IRA into his Traditional IRA. 3. Taylor will be subject to ordinary income taxes on withdrawals from the SIMPLE. 4. Taylor may be subject to a 25% early withdrawal penalty on amounts withdrawn from the SIMPLE. A)1 and 2. B)1 and 3. C)2, 3, and 4. D)1, 3, and 4.

D)1, 3, and 4.

An employer may reduce the three percent matching contribution requirement for a calendar year in a SIMPLE, IRA, but only under which of the following circumstances? 1. The limit is reduced to no less than one percent. 2. The limit is not reduced for more than two years out of the five year period that ends with (and includes) the year for which the election is effective. 3. Employees are notified of the reduced limit within a reasonable period of time before the 60 day election periodfor a salary reduction agreement. A)1 and 2. B)1 and 3. C)2 and 3. D)All of the above must be present. E)None of the above must be present.

D)All of the above must be present.

Distributions may be paid from a 403(b) account after: A)Employee death or disability. B)Employee turns age 59½. C)Employee is separated from service. D)All of the above. E)None of the above.

D)All of the above.