CRPC TEST QUESTIONS AND
ANSWERS (GRADED A)
No other qualified plan or 403(b) - ANSWER-Simple IRA or Simple 401(k)
Younger employees benefit from years of contributions and compounding - ANSWER-
Profit sharing, SEP, or Tandem Plan
Business has stable cash flow and owner willing to make annual financial commitment,
but either unwilling or unable to commit more than 25% compensation - ANSWER-
Money Purchase or Target Benefit Plan to provid age-weighted plan
Means to allow owner to meet his/her retirement - ANSWER-Defined Benefit Plan
No more than 100 employees earing $5000 or more - ANSWER-Simple IRA or Simple
401(k)
Desire plan that will motivate employees - ANSWER-Profit sharing, SEP, or Tandem
Plan
Seeks maximum tax shelter - ANSWER-Defined Benefit Plan
Business cash flow fluctuates - ANSWER-Profit sharing, SEP, or Tandem Plan
Owner willing to make minimal contribution-2% or 3% of compensation - ANSWER-
Simple IRA or Simple 401(k)
Means to allow owner to meet his/her retirement - ANSWER-Defined Benefit Plan
Desire very low administrative cost - ANSWER-Simple IRA or Simple 401(k)
Willing to accept investment risk - ANSWER-Defined Benefit Plan
Easire to communicate plan to employees, and reduce administrative costs - ANSWER-
Money Purchase or Target Benefit Plan to provid age-weighted plan
Business Cash flow fluctuates - ANSWER-Profit sharing, SEP, or Tandem Plan
No other qualified plan or 403(b) - ANSWER-Simple IRA or Simple 401(k)
Willing and able to make annual financial commitment in excess of 25% of
compensation - ANSWER-Defined Benefit Plan
Shift investment risk to employees - ANSWER-Profit sharing, SEP, or Tandem Plan
ANSWERS (GRADED A)
No other qualified plan or 403(b) - ANSWER-Simple IRA or Simple 401(k)
Younger employees benefit from years of contributions and compounding - ANSWER-
Profit sharing, SEP, or Tandem Plan
Business has stable cash flow and owner willing to make annual financial commitment,
but either unwilling or unable to commit more than 25% compensation - ANSWER-
Money Purchase or Target Benefit Plan to provid age-weighted plan
Means to allow owner to meet his/her retirement - ANSWER-Defined Benefit Plan
No more than 100 employees earing $5000 or more - ANSWER-Simple IRA or Simple
401(k)
Desire plan that will motivate employees - ANSWER-Profit sharing, SEP, or Tandem
Plan
Seeks maximum tax shelter - ANSWER-Defined Benefit Plan
Business cash flow fluctuates - ANSWER-Profit sharing, SEP, or Tandem Plan
Owner willing to make minimal contribution-2% or 3% of compensation - ANSWER-
Simple IRA or Simple 401(k)
Means to allow owner to meet his/her retirement - ANSWER-Defined Benefit Plan
Desire very low administrative cost - ANSWER-Simple IRA or Simple 401(k)
Willing to accept investment risk - ANSWER-Defined Benefit Plan
Easire to communicate plan to employees, and reduce administrative costs - ANSWER-
Money Purchase or Target Benefit Plan to provid age-weighted plan
Business Cash flow fluctuates - ANSWER-Profit sharing, SEP, or Tandem Plan
No other qualified plan or 403(b) - ANSWER-Simple IRA or Simple 401(k)
Willing and able to make annual financial commitment in excess of 25% of
compensation - ANSWER-Defined Benefit Plan
Shift investment risk to employees - ANSWER-Profit sharing, SEP, or Tandem Plan
