ExamFX Qualified Plans

List 3 required characteristics of a SIMPLE plan

1. Employees must receive a minimum of $5,000 in annual compensation 2. No more than 100 employees 3. No other qualified plan can be used

The advantage of qualified plans to employers is what? 3 advantages

1. Tax deductible contributions 2. Earnings accumulate tax deferred 3. Lump-sum distributions to employees are eligible for favorable tax treatment

List some early exceptions for early withdraw from a qualified plan? & list something that would incur a 10% penalty for early withdraw

- a divorce decree - death or disability - a loan from the plan - qualified rollover Participants early withdraw to pay off debt would incur a 10% penalty

Who is a SIMPLE plan available to?

Small businesses that employ not more than 100 employees

Who would be allowed catch-up contributions in an individual qualified plan?

Individuals age 50 or older

If a retirement plan or annuity is "qualified" this means what?

It has favorable tax treatment

A 403(b) tax sheltered annuity is available for whom?

Teachers & non profit organizations

Who may contribute to an HR-10?

"A self employed" plumber

Qualified plans must have what requirement ? "Employer contributions made to a qualified plan are subject to what requirement?"

Must have a vesting requirement