3/27/25, 8:52 CRPC - Module #7 Flashcards |
AM
CRPC - MODULE #7 EXAM QUESTIONS AND ANSWERS WITH COMPLETE
SOLUTIONS VERIFIED GRADED A++
cash balance plans
(In-service withdrawals at any age may be permitted from profit sharing plans
In-service withdrawals prior to age 62
(including ESOPs and stock bonus plans), assuming certain other requirements are
are not permitted from which of the
met. In-service withdrawals prior to age 62 are not permitted from any pension plan,
following?
including cash balance plans.)
The IRS permits hardship withdrawals from payments to prevent defaulting on a mortgage for a second home
401(k) plans in cases of "immediate and (Although payments to prevent eviction from a primary residence are considered
heavy financial need." Which of the immediate and heavy, payments for a second home are not. The other options are
following is not considered immediate and considered immediate and heavy expenses.)
heavy?
All of the above. (the difference in creditor protection between the two savings
vehicles
the difference in when the 10% penalty will apply to distributions
the difference in RMD rules that apply to the two savings vehicles)
Before rolling assets from an employer
sponsored plan to an IRA one should
(Prior to doing a rollover of assets from an employer plan to IRA there are number of
consider which of the following?
factors need to be considered and compared. These include an examination of fees,
services offered, investment options, when penalty free withdrawals are available,
when required minimum distributions may be required and protection of assets from
creditors.)
they generally result in less money for retirement.
Taxes may be deferred on a qualified plan (Rollovers generally result in more money for retirement. Tax deferral enables the
distribution if it is rolled over to an IRA, entire distribution to continue to earn tax-deferred money. Taking a lump-sum
TSA, SEP, governmental 457 plan, or to distribution results in immediate taxation. Amounts distributed from qualified plans
another qualified plan. All are true must be transferred to a new account within 60 days of receipt to avoid taxation. All
regarding rollovers except distributions from the named tax-deferred plans result in taxation as ordinary
income, capital gains treatment is not available.)
the entire distribution will be subject to immediate taxation.
(By rolling over assets to an existing IRA, the plan assets less the amount withheld
All of the following are disadvantages to
escape immediate taxation. Taxes are deferred until the participant begins
performing an indirect rollover from a
withdrawing money. A mandatory 20% withholding is imposed on a qualified plan
qualified plan to an existing IRA except
distribution if the plan issues a check to the participant. Finally, if an indirect
rollover is not completed within 60-days the full distribution amount will be taxed.)
the vested cash balance in the plan
(The participant's vested cash balance in the plan may be rolled over to an existing
Not all distributions from a qualified plan IRA. Distributions that are part of a series of substantially equal payments for the life
may be rolled over into a traditional IRA. of the participant or the joint lives of the participant and the participant's designated
Which one of the following distributions is beneficiary are not eligible to be rolled over. Hence, such distributions are not
an "eligible rollover distribution"? eligible rollover distributions. Neither are dividends on employer securities held by
the plan that are distributed in cash to participants or the taxable cost of life
insurance provided by the plan.)
When must the designated beneficiary be September 30 of the year following the participant's death.
determined in order to avoid having to (The designated beneficiary must be determined by September 30 of the year
distribute the full IRA balance under the 5- following the participant's death in order to avoid having to distribute the full IRA
year rule? balance under the 5-year rule.)
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4
AM
CRPC - MODULE #7 EXAM QUESTIONS AND ANSWERS WITH COMPLETE
SOLUTIONS VERIFIED GRADED A++
cash balance plans
(In-service withdrawals at any age may be permitted from profit sharing plans
In-service withdrawals prior to age 62
(including ESOPs and stock bonus plans), assuming certain other requirements are
are not permitted from which of the
met. In-service withdrawals prior to age 62 are not permitted from any pension plan,
following?
including cash balance plans.)
The IRS permits hardship withdrawals from payments to prevent defaulting on a mortgage for a second home
401(k) plans in cases of "immediate and (Although payments to prevent eviction from a primary residence are considered
heavy financial need." Which of the immediate and heavy, payments for a second home are not. The other options are
following is not considered immediate and considered immediate and heavy expenses.)
heavy?
All of the above. (the difference in creditor protection between the two savings
vehicles
the difference in when the 10% penalty will apply to distributions
the difference in RMD rules that apply to the two savings vehicles)
Before rolling assets from an employer
sponsored plan to an IRA one should
(Prior to doing a rollover of assets from an employer plan to IRA there are number of
consider which of the following?
factors need to be considered and compared. These include an examination of fees,
services offered, investment options, when penalty free withdrawals are available,
when required minimum distributions may be required and protection of assets from
creditors.)
they generally result in less money for retirement.
Taxes may be deferred on a qualified plan (Rollovers generally result in more money for retirement. Tax deferral enables the
distribution if it is rolled over to an IRA, entire distribution to continue to earn tax-deferred money. Taking a lump-sum
TSA, SEP, governmental 457 plan, or to distribution results in immediate taxation. Amounts distributed from qualified plans
another qualified plan. All are true must be transferred to a new account within 60 days of receipt to avoid taxation. All
regarding rollovers except distributions from the named tax-deferred plans result in taxation as ordinary
income, capital gains treatment is not available.)
the entire distribution will be subject to immediate taxation.
(By rolling over assets to an existing IRA, the plan assets less the amount withheld
All of the following are disadvantages to
escape immediate taxation. Taxes are deferred until the participant begins
performing an indirect rollover from a
withdrawing money. A mandatory 20% withholding is imposed on a qualified plan
qualified plan to an existing IRA except
distribution if the plan issues a check to the participant. Finally, if an indirect
rollover is not completed within 60-days the full distribution amount will be taxed.)
the vested cash balance in the plan
(The participant's vested cash balance in the plan may be rolled over to an existing
Not all distributions from a qualified plan IRA. Distributions that are part of a series of substantially equal payments for the life
may be rolled over into a traditional IRA. of the participant or the joint lives of the participant and the participant's designated
Which one of the following distributions is beneficiary are not eligible to be rolled over. Hence, such distributions are not
an "eligible rollover distribution"? eligible rollover distributions. Neither are dividends on employer securities held by
the plan that are distributed in cash to participants or the taxable cost of life
insurance provided by the plan.)
When must the designated beneficiary be September 30 of the year following the participant's death.
determined in order to avoid having to (The designated beneficiary must be determined by September 30 of the year
distribute the full IRA balance under the 5- following the participant's death in order to avoid having to distribute the full IRA
year rule? balance under the 5-year rule.)
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4
