Qualified Plans
Which of the following statements is true concerning a 403(b) plan (TSA)?
An arrangement made with certain tax-exempt "501c(3)" organizations and public schools under which employees may set aside amounts of income for retirement purposes
Which of the following is NOT true regarding a non qualified retirement plan?
It needs IRS approval
All of the following are true of the federal tax advantages of a qualified plan, EXCEPT
At distribution, all amounts received by the employee are free of taxes
Which of the following is an example of a non qualified retirement plan?
Executive bonus plan
The advantage of qualified plans to employers is
Tax deductible contributions
All of the following would be different between qualified and non qualified retirement plans EXCEPT
Taxation on accumulation
Which of the following is true of a qualified plan?
It has a tax benefit for both employer and employee
Under the 401(k) bonus or thrift plan, the employer will contribute
An undetermined percentage for each dollar contributed by the employee
Which of the following describes the tax advantage of a qualified retirement plan?
The earnings in the plan accumulate tax deferred
An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers, for example, is a(n)
403(b) Plan (TSA)
Employer contributions made to a qualified plan
Are subject to vesting requirements
SIMPLE Plans require all of the following EXCEPT
At least 1,000 employees
Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?
SEPs limit participation to members of closely held corporations
A tax-sheltered annuity is a special tax-favored retirement plan available to
Certain groups of employees only
What is the primary purpose of a 401(k) plan?
Retirement
If a retirement plan or annuity is "qualified," this means
It has favorable tax treatment
All of the following are general requirements of a qualified plan EXCEPT
The plan must provide an offset for social security benefits
For a retirement plan to be qualified, it must be designed for the benefit of
Employees
An individual has been contributing to a retirement account after taxes are taken out of his paycheck. His financial advisor told him that he will be allowed to make contributions after age 70 1/2. The account owner does not have to pay taxes on the growth of his account. What type of retirement account is this?
Roth IRA (Roth IRAs have several distinguishing features. Unlike traditional IRAs, the account owner can continue beyond age 70 1/2, and distributions do not have to begin at age 70 1/2. The contributions are not tax-deductible
Which of the followings statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?
SEPs limit participation to members of closely held corporations
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
Under a SIMPLE plan, which of the following is true regarding taxation on both contributions and earnings?
They are tax deferred until withdrawn
If a company has a Simplified Employee Pension plan, what type of plan is it?
A defined contribution plan for a small business
