QKA - 1 RETIREMENT PLAN FUNDAMENTALS
Verified Multiple Choice and Conceptual Actual
Frequently Tested Exam Questions With
Reviewed 100% Correct Detailed Answers
Guaranteed Pass!!Current Update!!
1. Why would someone want to establish a money purchase plan?
There are two reasons:
- ANSWER 1) Some employers actually want the obligation to make a
contribution so this can be communicated to employees.
2) Unions and other classes of employees that negotiate benefits want the
certainty of a contribution for their members.
2. Profit Sharing and stock bonus plans:
- These are not required by law, to have___________________ The employer may
have discretion to _____________ - ANSWER mandatory employer
contributions.
determine the amount to be contributed each year.
3. Profit Sharing Plan:
- A profit sharing plan is a defined contribution plan under which the
________________________________________________
- Some plans, however, do elect to include a specific employer contribution
formula in their plan document. Most profit sharing plans include a
,________________ - ANSWER employer's contribution each year may be
determined at the employer's discretion.
401(k) feature.
4. Profit Sharing Plan
- Discretionary formulas are allowed, meaning __________________ - ANSWER
the employer determines the amount to contribute each year.
5. Profit Sharing Plan
- The plan may have a fixed formula________________ - ANSWER but it is not
required.
6. Profit Sharing Plan
- If the formula is based on the employer's profit or contingent on the employer
having profits, the plan document must _______________ - ANSWER define
how those profits are calculated.
7. Profit Sharing Plan
- While it is not required that an employer make contributions each year, the law
requires that they be - ANSWER substantial and recurring. Failure to do so can
cause accelerated vesting.
8. Profit Sharing Plan
- The allocation formula must be - ANSWER defined in the plan document.
, 9. Profit Sharing Plan
Distribution rules are - ANSWER flexible and in-service distributions can be
allowed (but are not required) for: financial hardship, a stated age, a disability, any
contributions that have been in the plan for at least 2 years, or after 60 months of
plan participation.
10. Profit Sharing Plan
- Required to comply with the qualified joint and survivor annuity rules only if -
ANSWER it fails to satisfy the exemptions.
11. Why would someone want to establish a profit sharing plan?
There are two main reasons:
- ANSWER 1) Flexibility in contributions and in-service distributions.
2) Ability to add a 401(k) deferral feature.
12. Stock bonus plan:
- A stock bonus plan is very much like a profit sharing plan. The primary difference
is that, - ANSWER under a stock bonus plan, the benefits are distributable in
employer stock.
13. A stock bonus plan has the same - ANSWER contribution and allocation
formula options as a profit sharing plan.
Verified Multiple Choice and Conceptual Actual
Frequently Tested Exam Questions With
Reviewed 100% Correct Detailed Answers
Guaranteed Pass!!Current Update!!
1. Why would someone want to establish a money purchase plan?
There are two reasons:
- ANSWER 1) Some employers actually want the obligation to make a
contribution so this can be communicated to employees.
2) Unions and other classes of employees that negotiate benefits want the
certainty of a contribution for their members.
2. Profit Sharing and stock bonus plans:
- These are not required by law, to have___________________ The employer may
have discretion to _____________ - ANSWER mandatory employer
contributions.
determine the amount to be contributed each year.
3. Profit Sharing Plan:
- A profit sharing plan is a defined contribution plan under which the
________________________________________________
- Some plans, however, do elect to include a specific employer contribution
formula in their plan document. Most profit sharing plans include a
,________________ - ANSWER employer's contribution each year may be
determined at the employer's discretion.
401(k) feature.
4. Profit Sharing Plan
- Discretionary formulas are allowed, meaning __________________ - ANSWER
the employer determines the amount to contribute each year.
5. Profit Sharing Plan
- The plan may have a fixed formula________________ - ANSWER but it is not
required.
6. Profit Sharing Plan
- If the formula is based on the employer's profit or contingent on the employer
having profits, the plan document must _______________ - ANSWER define
how those profits are calculated.
7. Profit Sharing Plan
- While it is not required that an employer make contributions each year, the law
requires that they be - ANSWER substantial and recurring. Failure to do so can
cause accelerated vesting.
8. Profit Sharing Plan
- The allocation formula must be - ANSWER defined in the plan document.
, 9. Profit Sharing Plan
Distribution rules are - ANSWER flexible and in-service distributions can be
allowed (but are not required) for: financial hardship, a stated age, a disability, any
contributions that have been in the plan for at least 2 years, or after 60 months of
plan participation.
10. Profit Sharing Plan
- Required to comply with the qualified joint and survivor annuity rules only if -
ANSWER it fails to satisfy the exemptions.
11. Why would someone want to establish a profit sharing plan?
There are two main reasons:
- ANSWER 1) Flexibility in contributions and in-service distributions.
2) Ability to add a 401(k) deferral feature.
12. Stock bonus plan:
- A stock bonus plan is very much like a profit sharing plan. The primary difference
is that, - ANSWER under a stock bonus plan, the benefits are distributable in
employer stock.
13. A stock bonus plan has the same - ANSWER contribution and allocation
formula options as a profit sharing plan.
