QKA 1 FULL Module 1-9 Verified Multiple
Choice and Conceptual Actual Frequently
Tested Exam Questions With Reviewed 100%
Correct Detailed Answers
Guaranteed Pass!!Current Update!!
1. What is the purpose of tax incentives for qualified retirement plans? -
ANSWER To encourage employers to adopt plans and employees to save
for retirement.
2. What tax benefits do qualified retirement plans receive? - ANSWER Tax-
deductible contributions, tax credits for small businesses, deferred taxation,
and tax preferences on earnings.
3. What law governs retirement plans? - ANSWER Employee Retirement
Income Security Act of 1974 (ERISA).
4. Which agencies have jurisdiction over tax issues of qualified plans? -
ANSWER Department of the Treasury and Internal Revenue Service
(IRS).
5. What does the Department of Labor (DOL) oversee under ERISA? - ANSWER
Participant rights protection and fiduciary behavior.
,6. What does Title I of ERISA contain? - ANSWER Labor law provisions
including eligibility, vesting, funding, reporting, disclosure, and fiduciary
standards.
7. What does Title II of ERISA address? - ANSWER Tax-related provisions
amending IRC sections for qualified plans.
8. What is the role of the Pension Benefit Guaranty Corporation (PBGC) under
Title IV? - ANSWER Provides insurance for defined benefit plans and
pays guaranteed benefits if plans terminate without sufficient assets.
9. What does Title III of ERISA cover? - ANSWER Administrative provisions
dividing enforcement between IRS and DOL.
10.What additional responsibility was given to the PBGC for defined
contribution plans? - ANSWER Maintaining benefits for lost participants
in terminated plans.
11.What must a qualified plan satisfy under IRC §401(a)? - ANSWER
Requirements in both form (plan document) and operation.
12.What does compliance in form mean for a qualified plan? - ANSWER
The plan document includes relevant IRC §401(a) provisions.
,13.What is required by Treas. Reg. §1.401-1(a)(2) for a plan? - ANSWER A
definite written program.
14.What happens if a plan fails to satisfy the form requirement? - ANSWER
It risks disqualification, even if operated properly.
15.How can plan document violations be corrected? - ANSWER Within the
remedial amendment period or via the IRS's EPCRS.
16.What types of plans are exempt from some IRC §401(a) requirements? -
ANSWER Governmental plans and non-electing church plans.
17. Under IRC §401(a)(1) - ANSWER who must a qualified plan
benefit?,Employees of the employer, including self-employed individuals.
18. What does IRC §401(a)(1) require for plan assets? - ANSWER They must
be held in a trust.
19.What is the exclusive benefit rule under IRC §401(a)(2)? - ANSWER The
plan must be maintained for the benefit of participants and beneficiaries,
not the employer.
20.What is an exception to the exclusive benefit rule? - ANSWER Return of
contributions under specific circumstances like mistake of fact.
, What is a mistake of fact in the context of returning contributions? - ANSWER
Typically a mathematical or typographical error, per PLR 9144041.
When can contributions be returned due to disallowance of deduction? -
ANSWER Within 12 months after IRS disallows the deduction.
What happens to earnings on contributions returned due to a mistake of fact? -
ANSWER Earnings cannot be returned, but losses reduce the amount
returned.
When can all plan assets revert to the employer? - ANSWER If the plan fails to
initially qualify and receives an adverse determination letter.
What condition must be met for reversion due to initial disqualification? -
ANSWER Contributions are conditioned on obtaining initial qualification.
What types of expenses can a plan pay under the exclusive benefit rule? -
ANSWER Reasonable administrative expenses like trustee or recordkeeping
fees.
What does IRC §401(a)(3) and §401(a)(6) regulate? - ANSWER Minimum age,
service requirements, and coverage of a fair cross-section of employees.
What does IRC §401(a)(4) ensure for qualified plans? - ANSWER
Nondiscrimination in favor of highly compensated employees (HCEs).
Choice and Conceptual Actual Frequently
Tested Exam Questions With Reviewed 100%
Correct Detailed Answers
Guaranteed Pass!!Current Update!!
1. What is the purpose of tax incentives for qualified retirement plans? -
ANSWER To encourage employers to adopt plans and employees to save
for retirement.
2. What tax benefits do qualified retirement plans receive? - ANSWER Tax-
deductible contributions, tax credits for small businesses, deferred taxation,
and tax preferences on earnings.
3. What law governs retirement plans? - ANSWER Employee Retirement
Income Security Act of 1974 (ERISA).
4. Which agencies have jurisdiction over tax issues of qualified plans? -
ANSWER Department of the Treasury and Internal Revenue Service
(IRS).
5. What does the Department of Labor (DOL) oversee under ERISA? - ANSWER
Participant rights protection and fiduciary behavior.
,6. What does Title I of ERISA contain? - ANSWER Labor law provisions
including eligibility, vesting, funding, reporting, disclosure, and fiduciary
standards.
7. What does Title II of ERISA address? - ANSWER Tax-related provisions
amending IRC sections for qualified plans.
8. What is the role of the Pension Benefit Guaranty Corporation (PBGC) under
Title IV? - ANSWER Provides insurance for defined benefit plans and
pays guaranteed benefits if plans terminate without sufficient assets.
9. What does Title III of ERISA cover? - ANSWER Administrative provisions
dividing enforcement between IRS and DOL.
10.What additional responsibility was given to the PBGC for defined
contribution plans? - ANSWER Maintaining benefits for lost participants
in terminated plans.
11.What must a qualified plan satisfy under IRC §401(a)? - ANSWER
Requirements in both form (plan document) and operation.
12.What does compliance in form mean for a qualified plan? - ANSWER
The plan document includes relevant IRC §401(a) provisions.
,13.What is required by Treas. Reg. §1.401-1(a)(2) for a plan? - ANSWER A
definite written program.
14.What happens if a plan fails to satisfy the form requirement? - ANSWER
It risks disqualification, even if operated properly.
15.How can plan document violations be corrected? - ANSWER Within the
remedial amendment period or via the IRS's EPCRS.
16.What types of plans are exempt from some IRC §401(a) requirements? -
ANSWER Governmental plans and non-electing church plans.
17. Under IRC §401(a)(1) - ANSWER who must a qualified plan
benefit?,Employees of the employer, including self-employed individuals.
18. What does IRC §401(a)(1) require for plan assets? - ANSWER They must
be held in a trust.
19.What is the exclusive benefit rule under IRC §401(a)(2)? - ANSWER The
plan must be maintained for the benefit of participants and beneficiaries,
not the employer.
20.What is an exception to the exclusive benefit rule? - ANSWER Return of
contributions under specific circumstances like mistake of fact.
, What is a mistake of fact in the context of returning contributions? - ANSWER
Typically a mathematical or typographical error, per PLR 9144041.
When can contributions be returned due to disallowance of deduction? -
ANSWER Within 12 months after IRS disallows the deduction.
What happens to earnings on contributions returned due to a mistake of fact? -
ANSWER Earnings cannot be returned, but losses reduce the amount
returned.
When can all plan assets revert to the employer? - ANSWER If the plan fails to
initially qualify and receives an adverse determination letter.
What condition must be met for reversion due to initial disqualification? -
ANSWER Contributions are conditioned on obtaining initial qualification.
What types of expenses can a plan pay under the exclusive benefit rule? -
ANSWER Reasonable administrative expenses like trustee or recordkeeping
fees.
What does IRC §401(a)(3) and §401(a)(6) regulate? - ANSWER Minimum age,
service requirements, and coverage of a fair cross-section of employees.
What does IRC §401(a)(4) ensure for qualified plans? - ANSWER
Nondiscrimination in favor of highly compensated employees (HCEs).
