Page 1 of 208
Retirement Administrator Practice Exam:
Questions & Answers With Explanation
Newest .Download instant pdf .
Q1. Which type of retirement plan is subject to the Employee
Retirement Income Security Act (ERISA)?
A) Traditional IRA
B) Roth IRA
C) 401(k) plan sponsored by a private employer (Section 3(2) of
ERISA)
D) 529 College Savings Plan
Rationale: ERISA applies to most private-sector employer-
sponsored retirement plans, including 401(k), pension, and profit-
sharing plans. IRAs are generally not subject to ERISA unless they
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are Simplified Employee Pension (SEP) plans or SIMPLE IRAs with
employer involvement.
Q2. A company wants to exclude part-time employees who work
less than 1,000 hours per year from its 401(k) plan. Under IRC
Section 410(a), is this permissible?
A) No, all employees must be included regardless of hours
B) Yes, the plan may exclude employees who work less than
1,000 hours in a 12-month period
C) Yes, but only if the employee consents
D) No, the limit is 500 hours
Rationale: IRC Section 410(a)(1)(A) allows plans to exclude
employees who have not completed 1,000 hours of service in a
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12-month consecutive period. This is the standard eligibility
threshold for most plans.
Q3. Under the SECURE Act 2.0 (effective 2024), long-term part-
time (LTPT) employees must be eligible for 401(k) deferrals after
completing:
A) 1,000 hours in one year
B) 500 hours in three consecutive years (or 2 years for plan
years after 2024)
C) 1,000 hours in two years
D) Any employee regardless of hours
Rationale: SECURE Act 2.0 reduced the LTPT eligibility from 3
years to 2 years for plan years beginning after December 31,
2024. Employees with 500+ hours in two consecutive years must
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be allowed to defer (though employer contributions may still be
excluded).
Q4. Which of the following plans is specifically designed for
small businesses (100 or fewer employees) and requires
employer contributions?
A) 401(k) Safe Harbor
B) SIMPLE IRA Plan
C) Defined Benefit Pension Plan
D) Non-Qualified Deferred Compensation Plan
Rationale: SIMPLE (Savings Incentive Match Plan for Employees)
IRAs are for employers with 100 or fewer employees. Employers
must either match employee deferrals (up to 3%) or make a 2%
nonelective contribution for all eligible employees.
Retirement Administrator Practice Exam:
Questions & Answers With Explanation
Newest .Download instant pdf .
Q1. Which type of retirement plan is subject to the Employee
Retirement Income Security Act (ERISA)?
A) Traditional IRA
B) Roth IRA
C) 401(k) plan sponsored by a private employer (Section 3(2) of
ERISA)
D) 529 College Savings Plan
Rationale: ERISA applies to most private-sector employer-
sponsored retirement plans, including 401(k), pension, and profit-
sharing plans. IRAs are generally not subject to ERISA unless they
,Page 2 of 208
are Simplified Employee Pension (SEP) plans or SIMPLE IRAs with
employer involvement.
Q2. A company wants to exclude part-time employees who work
less than 1,000 hours per year from its 401(k) plan. Under IRC
Section 410(a), is this permissible?
A) No, all employees must be included regardless of hours
B) Yes, the plan may exclude employees who work less than
1,000 hours in a 12-month period
C) Yes, but only if the employee consents
D) No, the limit is 500 hours
Rationale: IRC Section 410(a)(1)(A) allows plans to exclude
employees who have not completed 1,000 hours of service in a
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12-month consecutive period. This is the standard eligibility
threshold for most plans.
Q3. Under the SECURE Act 2.0 (effective 2024), long-term part-
time (LTPT) employees must be eligible for 401(k) deferrals after
completing:
A) 1,000 hours in one year
B) 500 hours in three consecutive years (or 2 years for plan
years after 2024)
C) 1,000 hours in two years
D) Any employee regardless of hours
Rationale: SECURE Act 2.0 reduced the LTPT eligibility from 3
years to 2 years for plan years beginning after December 31,
2024. Employees with 500+ hours in two consecutive years must
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be allowed to defer (though employer contributions may still be
excluded).
Q4. Which of the following plans is specifically designed for
small businesses (100 or fewer employees) and requires
employer contributions?
A) 401(k) Safe Harbor
B) SIMPLE IRA Plan
C) Defined Benefit Pension Plan
D) Non-Qualified Deferred Compensation Plan
Rationale: SIMPLE (Savings Incentive Match Plan for Employees)
IRAs are for employers with 100 or fewer employees. Employers
must either match employee deferrals (up to 3%) or make a 2%
nonelective contribution for all eligible employees.
