QKA-1 Qualified Retirement Plans & ERISA
Compliance - Verified Multiple Choice and
Conceptual Actual Frequently Tested Exam
Questions With Reviewed 100% Correct
Detailed Answers
Guaranteed Pass!!Current Update!!
1. A plan cannot satisfy ACP Safe Harbor test without meeting these
requirements: - ANSWER -Satisfy ADP test
-match can only be made on deferrals up to first 6% of comp
-rate of match cannot increase as rate of deferrals increases
-after-tax contributions always subject to ACP test
2. Cross-tested allocation method is NOT ________ - ANSWER a design based
safe harbor allocation.
Nondiscrimination must be performed every year
When salaries are the same, older participants may receive a larger allocation
3. TRUE or FALSE: A plan may satisfy ADP safe harbor test and not satisfy ACP safe
harbor test - ANSWER TRUE
,4. What matching formula satisfies traditional ADP safe harbor - ANSWER
traditional ADP safe harbor matching must be at least 100% of the first 3%, plus
50% of deferrals on 2% deferred
5. What characteristics does a 403(b) need to be exempt from ERISA - ANSWER
-only contribution source is elective deferral
-participation is voluntary
-employer involvement is limited
6. Characteristics of a pension plan - ANSWER -subject to minimum funding
requirement
-may not make hardship distributions
-payments may be paid as an annuity
-ESOPS must be funded with stock of employer
7. Options for a profit sharing plan for the reallocation of forfeitures - ANSWER
-paying plan expenses
-reducing employer contributions
-using it for additional contributions
may be utilized annually, but not accumulated year by year
8. Can a QJSA be paid if the spouse does not consent? - ANSWER yes: it can
be paid regardless of spouse's consent. consent is required when payments
besides annuity are requested.
,9. TRUE or FALSE: In a defined contribution plan, a participants benefit is based
solely on the value of the account balance - ANSWER TRUE
10. It is uncommon for a small company to have a deferral only 401(k) plan
because of two rules: - ANSWER Top heavy and non discrimination
11. What is an employer contribution made to all employees regardless of and
not tied to employee deferrals? - ANSWER Nonelective contributions
12. TRUE or FALSE: money purchase plans adopted in 2025 do not permit
employee elective deferrals - ANSWER True
13. TRUE or FALSE: a stock bonus plan has the same contribution and allocation
formula as a profit sharing plan - ANSWER TRUE
14. What plan type is designed to invest primarily in employer stock/securities -
ANSWER ESOP (Employee Stock Ownership Plan)
15. What is the maximum number of hours of service a SEP plan may require for
an allocation - ANSWER no minimum number of hours may be required
16. TRUE or FALSE: A SEP may not impose restrictions on withdrawals, employees
can withdraw all funds anytime - ANSWER TRUE
, 17. TRUE or FALSE: a Simple 401(k) plan is a qualified plan subject to ERISA rules,
but contributions are made to each participants IRA - ANSWER FALSE: the plan
is subject to ERISA rules, but contributions are made to the plan's trust (not IRAs)
18. Contributions under a 403(b) can only be made to - ANSWER - an annuity
contract provided through insurance co.
-custodial account invested in mutual funds
-retirement account setup for church employees
19. 403(b) plans are sometimes referred to as ____ - ANSWER tax sheltered
annuity plans
20. The gateway test is only required when: - ANSWER a plan wants to test
allocations for nondiscrimination using cross-testing
What two ways to satisfy the gateway tests? - ANSWER 1 each NHCE receives
allocation of 5% of 415 comp
2 allocation rate of any NHCE is at least 1/3 of the highest allocation for any HCE
TRUE or FALSE: a plan cannot require an employee to be employed at the end of
the year to receive an allocation - ANSWER FALSE: a plan can require
employees to be employed at the end of the plan year
if the plan imposes service condition, it cannot be more than 1000 hours
Compliance - Verified Multiple Choice and
Conceptual Actual Frequently Tested Exam
Questions With Reviewed 100% Correct
Detailed Answers
Guaranteed Pass!!Current Update!!
1. A plan cannot satisfy ACP Safe Harbor test without meeting these
requirements: - ANSWER -Satisfy ADP test
-match can only be made on deferrals up to first 6% of comp
-rate of match cannot increase as rate of deferrals increases
-after-tax contributions always subject to ACP test
2. Cross-tested allocation method is NOT ________ - ANSWER a design based
safe harbor allocation.
Nondiscrimination must be performed every year
When salaries are the same, older participants may receive a larger allocation
3. TRUE or FALSE: A plan may satisfy ADP safe harbor test and not satisfy ACP safe
harbor test - ANSWER TRUE
,4. What matching formula satisfies traditional ADP safe harbor - ANSWER
traditional ADP safe harbor matching must be at least 100% of the first 3%, plus
50% of deferrals on 2% deferred
5. What characteristics does a 403(b) need to be exempt from ERISA - ANSWER
-only contribution source is elective deferral
-participation is voluntary
-employer involvement is limited
6. Characteristics of a pension plan - ANSWER -subject to minimum funding
requirement
-may not make hardship distributions
-payments may be paid as an annuity
-ESOPS must be funded with stock of employer
7. Options for a profit sharing plan for the reallocation of forfeitures - ANSWER
-paying plan expenses
-reducing employer contributions
-using it for additional contributions
may be utilized annually, but not accumulated year by year
8. Can a QJSA be paid if the spouse does not consent? - ANSWER yes: it can
be paid regardless of spouse's consent. consent is required when payments
besides annuity are requested.
,9. TRUE or FALSE: In a defined contribution plan, a participants benefit is based
solely on the value of the account balance - ANSWER TRUE
10. It is uncommon for a small company to have a deferral only 401(k) plan
because of two rules: - ANSWER Top heavy and non discrimination
11. What is an employer contribution made to all employees regardless of and
not tied to employee deferrals? - ANSWER Nonelective contributions
12. TRUE or FALSE: money purchase plans adopted in 2025 do not permit
employee elective deferrals - ANSWER True
13. TRUE or FALSE: a stock bonus plan has the same contribution and allocation
formula as a profit sharing plan - ANSWER TRUE
14. What plan type is designed to invest primarily in employer stock/securities -
ANSWER ESOP (Employee Stock Ownership Plan)
15. What is the maximum number of hours of service a SEP plan may require for
an allocation - ANSWER no minimum number of hours may be required
16. TRUE or FALSE: A SEP may not impose restrictions on withdrawals, employees
can withdraw all funds anytime - ANSWER TRUE
, 17. TRUE or FALSE: a Simple 401(k) plan is a qualified plan subject to ERISA rules,
but contributions are made to each participants IRA - ANSWER FALSE: the plan
is subject to ERISA rules, but contributions are made to the plan's trust (not IRAs)
18. Contributions under a 403(b) can only be made to - ANSWER - an annuity
contract provided through insurance co.
-custodial account invested in mutual funds
-retirement account setup for church employees
19. 403(b) plans are sometimes referred to as ____ - ANSWER tax sheltered
annuity plans
20. The gateway test is only required when: - ANSWER a plan wants to test
allocations for nondiscrimination using cross-testing
What two ways to satisfy the gateway tests? - ANSWER 1 each NHCE receives
allocation of 5% of 415 comp
2 allocation rate of any NHCE is at least 1/3 of the highest allocation for any HCE
TRUE or FALSE: a plan cannot require an employee to be employed at the end of
the year to receive an allocation - ANSWER FALSE: a plan can require
employees to be employed at the end of the plan year
if the plan imposes service condition, it cannot be more than 1000 hours
