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