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65 Cards in this Set
- Front
- Back
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All of the following statements regarding plan qualification under IRC §401(a) are TRUE, EXCEPT: A. A contribution may be returned to the employer if it was made due to a mistake of fact. B. A qualified plan must limit the compensation used to determine benefits, under IRC §401(a)(17). C. Contributions to a profit sharing plan must be recurring and substantial. D. A qualified plan must satisfy the minimum vesting standards under IRC §401(a)(7). E. Contributions may be returned to the employer due to plan disqualification. |
E Plan disqualification does not result in a return of contributions to the employer. |
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All of the following statements regarding plan disqualification are TRUE, EXCEPT: A. The employer loses its deduction for vested contributions only. B. Participant distributions may not be eligible for rollover. C. The statute of limitations is generally three years from the due date of a filed tax return. D. To avoid disqualification, defects must be corrected for all affected years, even if they are closed tax years. E. HCEs may be taxed on the entire vested account balance if the plan is disqualified solely due to a coverage violation. |
A If a plan is disqualified, the employer loses its deduction for nonvested contributions made to the plan for open tax years |
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Which of the following statements regarding Audit CAP is/are TRUE? I. The employer must agree to correct the violation. II. The employer must pay a sanction. III. The employer must sign a closing agreement with the IRS. A. I only B. III only C. I and II only D. II and III only E. I, II and III |
E All three statements are true. The Audit Closing Agreement Program (Audit CAP) arises when qualification failures are found in an IRS examination of the plan, and the violation is not an insignificant operational failure that is eligible for relief under SCP. The IRS examination may arise as part of either an audit or a review in connection with a favorable determination letter application. To obtain relief under Audit CAP, the employer must agree to correct the violation, pay a sanction, and sign a closing agreement with the IRS. |
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Which of the following statements regarding requirements for a qualified plan to be able to correct a significant failure under SCPis/are TRUE? I. The violation must not involve misuse or diversion of assets. II. The plan document must be a pre-approved prototype document. III. The plan must have a favorable determination letter, advisory letter or opinion letter. A. I only B. II only C. I and III only D. II and III only E. I, II and III |
C The Self-Correction Program (SCP) is a self-initiated correction program for resolving operational failures. Voluntary use of SCP may resolve significant violations and insignificant violations, but voluntary correction under SCP is available for only a limited period of time to fix a significant violation. SCP is also available for resolving insignificant operational failures that are discovered in an audit. If a qualification failure involves the diversion or misuse of plan assets, relief under SCP is not available. Thus, statement I is true. The plan document need not be a pre-approved prototype document to qualify for relief under SCP. However, a qualified plan must satisfy the favorable letter requirement if the operational failure is a significant violation. The favorable letter requirement is satisfied if the plan has a favorable opinion letter, advisory letter or determination letter, depending upon the type of plan. |
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All of the following statements regarding plan documents are TRUE, EXCEPT A. A volume submitter plan consists of a specimen plan and incorporates all possible operational provisions that may be used in that specimen plan. B. An M&P plan must be maintained by a sponsoring organization. C. An M&P plan consists of a basic plan document and a trust document. D. A trust document may be separate from the plan document. E. A trust document may be incorporated within the plan document. |
C A master or prototype (M&P) plan consists of a basic plan document and an adoption agreement. |
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All of the following statements regarding the IRS submission process are TRUE, EXCEPT: A. The submission cycle for individually designed plans is once every seven years. B. Form 2848 must be included in the submission process unless the submitting individual is the plan sponsor. C. The IRS issues a Revenue Procedure each year outlining the determination letter process. D. CPAs qualify as designated representatives on Form 2848. E. The submission cycle for pre-approved plans is once every six years. |
A The submission cycle for individually designed plans and pre-approved plans is once every six years. If the submitting individual isnot the plan sponsor, a signed Power of Attorney (Form 2848) must be included. Only attorneys, CPAs, enrolled agents, enrolledactuaries and enrolled retirement plan agents (ERPAs) may be designated as representatives under Form 2848. The IRS issues aRevenue Procedure each year outlining the determination letter process. Revenue Procedure XXXX-8 (where the first four digits arethe year of issuance) is updated annually to reflect current user fees |
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Which of the following statements regarding SIMPLE 401(k) plans is/are TRUE? I. Employer contributions are mandatory. II. Participant loans may be available. III. Form 5500 filing is required. A. I only B. II only C. I and III only D. II and III only E. I, II and III |
E All of the statements are true. Employer contributions are mandatory in SIMPLE 401(k) plans and SIMPLE IRAs. Loans to participants are not permitted in SIMPLE IRAs, but they are permitted in a SIMPLE 401(k) plan. Because a SIMPLE 401(k) plan is a qualified plan,it is subject to the normal Form 5500 filing requirements that apply to other qualified plans. |
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All of the following statements regarding pension and nonpension plans are TRUE, EXCEPT: A. Only pension plans are subject to minimum funding requirements under IRC §412. B. Both pension and nonpension plans may permit distribution upon attainment of age 59½. C. Only nonpension plans may include a 401(k) arrangement. D. Only pension plans are subject to the definitely determinable benefit requirements. E. Both pension and nonpension plans are subject to QJSA rules under IRC §417, but the nonpension plans may qualify for an exemption. |
B Pension plans may permit distribution only upon retirement, death, disability, termination of employment and in-service distributions to a participant who has reached age 62, even if normal retirement age is later than age 62. |
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Based on the following information, determine when Employee A will enter the plan: --The eligibility requirements are three months (elapsed time) and the attainment of age 21. --The entry date is the earlier of January 1st or July 1st following the date the eligibility requirements are satisfied. --Employee A's date of birth is July 19, 1971. --Employee A began working part-time on March 15, 2014. --Employee A became a full-time employee on August 6, 2015. A. June 15, 2014 B. July 1, 2014 C. March 15, 2015 D. November 6, 2015 E. January 1, 2016 |
B Employee A attained age 21 on July 19, 1992 and had three months of service on June 15, 2014. The entry dates are January 1 and July 1. Employee A enters the plan on July 1, 2014. When a plan uses the elapsed time method instead of the counting hours method, hours of service are not counted. Thus, status as a part-time or full-time employee is irrelevant with the elapsed time method. Service requirements for eligibility purposes are satisfied once the employee has satisfied the required period of service. |
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Which of the following statements regarding the elapsed time method to credit service is/are TRUE? I. Absences of less than 12 months are treated as continuous employment. II. Eligibility computation periods must be based on the plan year. III. It is an effective option for employers who want to exclude seasonal employees. A. I only B. III only C. I and II only D. II and III only E. I, II and III |
A Under the elapsed time method, hours of service are not counted and there are no eligibility computation periods to measure.Because an employee may attain a year of service regardless of the number of hours of service, the elapsed time method of crediting service is ineffective if the employer wants to exclude part-time or seasonal employees. |
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All of the following statements regarding a year of service are TRUE, EXCEPT: A. Hours of service may be calculated by actually counting hours or by using equivalencies. B. As an alternative to the counting hours method of crediting service a plan may elect to credit service under the elapsed time method. C. A plan may define a year of service as more than 1,000 hours providing participants are fully vested when they enter the plan. D. The 12-month computation period for determining a year of service may shift to the plan year if the employee does not meet the hours requirement in the first 12 months of employment. E. A plan may define a year of service as less than 1,000 hours. |
C A plan is not permitted to require more than 1,000 hours of service for a year of service. A plan may require more than one year of service in order to be eligible to receive certain types of contributions, but the year of service must be defined as 1,000 hours or less if the counting hours method is being used. |
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All of the following statements regarding eligibility requirements are TRUE, EXCEPT: A. A plan may have different eligibility requirements for 401(k) deferrals than for matching contributions. B. A 401(k) portion of a plan may not require more than one year of service for eligibility purposes. C. A plan that includes a 401(k) arrangement may require two years of service for matching contribution eligibility. D. A plan that includes a 401(k) arrangement may require two years of service for nonelective contribution eligibility. E. A plan may include an age 22 requirement as long as there is no service requirement. |
E A plan may impose less restrictive age and service requirements for eligibility to participate (that is, a shorter service requirement or ayounger age requirement than the statutory maximums), but may not impose more restrictive age and service requirements foreligibility to participate (that is, a longer service requirement or an older age requirement than the statutory maximums). An age 22requirement is more restrictive than the statutory maximum |
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All of the following categories are permissible exclusions from plan participation, EXCEPT: A. Part-time employees B. Officers C. Leased employees D. Staff employees under Division M E. Hourly employees |
A Exclusion of part-time employees or seasonal employees by category is an impermissible service condition if the term "part-time employee" is defined on the basis of a customary work schedule (such as, less than 20 hours per week). This is because the exclusion relates solely to the employee’s service. Under the one year of service definition, it is possible that a part-time or seasonal employee could be credited with enough hours of service to earn a year of service. For example, a part-time employee who normally works less than 20 hours of service per week might end up working substantially more hours because of a special project, overtime or busy seasons. If this employee were excluded from the plan solely because of his or her classification as a part-time employee, the plan would be in violation of the minimum service requirements. |
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All of the following statements regarding a break in service for eligibility purposes are TRUE, EXCEPT: A. A plan may define a break in service to be based on more than 12 consecutive months. B. A break in service is determined by the period of severance when using the elapsed time method. C. A plan may define a break in service to be 300 or fewer hours in an eligibility computation period. D. A break in service is determined based on the hours credited during an eligibility computation period when using the counting-hours method. E. Hours of service credited during certain unpaid leaves of absence are included in determining whether the employee has incurred a break in service. |
A A plan may not define a break in service on a period of more than 12 consecutive months. An employee incurs a break in service for eligibility purposes if he or she is credited with 500 or fewer hours of service during an eligibility computation period. Note that the 500-hour rule is a minimum standard. The plan may be more liberal by defining a break in service using a lesser hours of service rule(for example, fewer than 300 hours of service in an eligibility computation period), or by not imposing a break-in-service rule. |
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All of the following statements regarding the effect of changing a plan’s eligibility requirements from three months of service to one year of service are TRUE, EXCEPT: A. Existing participants must be allowed to continue participation, even if they haven’t satisfied the new eligibility conditions. B. Existing participants’ accrued benefits are protected. C. Rehired former participants may need to satisfy the new requirements before re-entry. D. Existing participants who have already satisfied the new eligibility conditions continue to participate. E. The right to continue to participate in a plan is not a protected benefit. |
A It is not required that existing participants be allowed to continue participation if they have not satisfied the new eligibility conditions. When the eligibility conditions are amended, the plan may (but is not required to) provide that the existing participants are grandfathered in, meaning that their participation continues even if they cannot satisfy the new eligibility conditions. If the eligibility requirements are modified in a way that the employee is no longer satisfies the requirements for participation, the participant’s accrued benefit is protected, but the employee will not accrue additional benefits until he or she first re-establishes the right to participate in the plan under the modified eligibility requirements. A change in eligibility requirements may affect the re-entry of a rehired employee who was formerly a participant in the plan. Unless the amendment grandfathered in former participants, the rehired employee would have to satisfy the new requirements before his or her participation could resume. The modification of the plan’s eligibility service condition will not cause an employee to lose participant status if the employee has already satisfied the new requirement. Just because an employee qualifies as a participant in the plan does not guarantee the employee the right to participate in the plan for the rest of his or her employment with the employer. The right to continue to participate in a plan is not a protected benefit. |
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Based on the following information, determine the HCEs for 2015: --Employees A and B are married. --The top-paid group election is not made. EE 14' comp 14' owner 15' comp 15' owner A $150,000 50% $160,000 45% A. Employees A, B and D only B. Employees A, C and D only C. Employees A, B, C and D only D. Employees A, C, D and E only E. Employees A, B, C, D and E |
C An employee is an HCE in 2015 if they are a more than 5% owner in 2014 or 2015, or if they earn more than $115,000 in 2014.Employees A, B, C and D satisfy the ownership requirements. While Employee B is not a direct owner, Employee A’s ownership is attributed to Employee B due to the fact they are married. Employees A and C also satisfy the compensation requirement. Employee E will not be an HCE until 2016 since compensation earned during the current plan year is not considered when determining HCEstatus. |
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All of the following statements regarding the calendar year data election are TRUE, EXCEPT: A. The election is independent of the top-paid group election. B. The election may be withdrawn by a plan amendment. C. The election is applicable to the compensation test. D. The election is not applicable to the ownership test. E. The election applies to calendar year plans |
E A calendar year data election affects the calculation of the lookback year. If the election is made, the lookback year is the calendaryear that begins in the 12-month period preceding the current plan year. The calendar year data election does not impact a calendaryear plan. It applies only to non-calendar year plans. The calendar year data election applies only to determine the lookback year for the compensation test and does not apply todetermine the HCEs under the 5 percent owner test. The calendar year data election is independent of the top-paid group election. The calendar-year data election must be reflected in the document only if a plan otherwise contains an HCE definition. If included inthe plan document, the calendar year data election may be withdrawn with a plan amendment. If a plan does not include a definitionof HCE, the calendar year data election may be made operationally |
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All of the following are HCEs within the meaning of IRC §414(q), EXCEPT: A. The grandson of a 25% owner B. A sole proprietor C. A 10% owner in an S Corporation D. A 15% partner in a partnership E. The wife of a 30% owner |
A A grandchild’s ownership interest is attributed under IRC §318 to that individual’s grandparent. However, a grandparent’s ownership interest is not attributed under IRC §318 to that individual’s grandchild. |
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Which of the following statements regarding the top-paid group election is/are TRUE? I. The top-paid group election is used in the determination of key employees II. The top-paid group election does not apply to the ownership test, only to the compensation test. III. Employees under age 21 may be excluded when determining the top-paid group. A. I only B. II only C. I and III only D. II and III only E. I, II, and III |
D The employer may elect to (but is not required to) limit the number of employees who can be treated as satisfying the compensation test for HCE determination purposes. Under the top-paid group election, an employee would satisfy the compensation test only if:• the employee was in the top 20 percent of employees for the look back year, ranked by compensation; and• the employee’s compensation for such prior year was in excess of the required dollar amount. The top-paid group election is based on the number of employees in the look back year. To determine the maximum number in the top-paid group,the 20 percent limitation is applied to the total number of employees, disregarding certain excluded employees. The employees excluded from being counted as part of the number of employees in the top-paid group are: • employees who have not completed at least six months of service by the end of the year; • employees who normally work less than 17½ hours per week; • employees who normally work less than six months per year; and • employees younger than 21. The top-paid group election applies only to the compensation test and does not affect whether an employee is an HCE under the 5 percent owner test. When making the top-paid group election, employees who are not HCEs because of the top-paid group determination are included in all coverage and nondiscrimination tests as NHCEs, unless they meet the 5 percent owner test. The top-paid group election may only be used for HCE determination purposes and may not be used in the determination of key employees. |
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Based on the following information, determine the top-heavy ratio as of December 31, 2015: EE key 12/31/15 blnc term date dist year A Yes $60,000 $0 B No $40,000 $50,000 13' G No $0 12/01/13 $12,000 14' A. $70,000 / $170,000 B. $70,000 / $235,000 C. $110,000 / $199,000 D. $150,000 / $220,000 E. $150,000 / $235,000 |
B First, determine the participants included. Include those with at least one hour of service in the determination year (2015). Participant G is not included in any of the top-heavy calculations Next determine which distributions need to be included. Participant B’s in-service distribution ($50,000) is included since it occurred during the five year period ending on the determination date. Participant F’s termination distribution ($15,000) is included since it occurred during the determination year. The numerator is the key employee balances ($60,000 + $10,000) and the denominator is all includable employee balances($60,000 + $40,000 + $10,000 + $35,000 + $25,000) plus the includable distributions ($50,000 + $15,000). The denominator totals$235,000. The top-heavy ratio is ($70,000 / $235,000). |
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Which of the following contributions is/are available to satisfy a top-heavy minimum requirement?I. Elective contributionsII. QMACsIII. QNECs A. I only B. II only C. I and III only D. II and III only E. I, II, and III |
D The top-heavy minimum must be satisfied with employer contributions and/or forfeitures. Employer contributions include nonelectiveprofit sharing contributions, pension contributions and matching contributions. Even contributions used to help the employer pass thenondiscrimination testing including QNECs, QMACs, safe harbor nonelective contributions and safe harbor matching contributionsmay be used to satisfy the top-heavy minimum requirement Elective contributions are employee contributions and may not be used to satisfy a top-heavy minimum requirement |
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All of the following are considered key employees, EXCEPT: A. A more than 5% owner of a company with annual compensation of $120,000 B. A company salesman with annual compensation, including commissions, of $225,000 C. An officer of a company with annual compensation of $175,000 D. The son of a company’s sole owner, with annual compensation of $25,000 E. A 4% owner of a company with annual compensation of $185,000 |
B An employee is a key employee if: they are a more than 5% owner;they are a more than 1% owner and have compensation in excess of $150,000 (This $150,000 compensation requirement is not indexed for cost-of-living increases.); or they are an includible officer satisfying the compensation test ($170,000 for 2014 and 2015). A company salesman who is neither an officer or an owner is not a key employee regardless of the amount of compensation the salesman earned. Compensation level alone will not make the employee a key employee. It is important not to confuse the key employee determination needed for top-heavy testing with the HCE determination needed for nondiscrimination testing. |
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Based on the following information, determine the amount that must be deposited into the plan in order to satisfy the required minimum top-heavy contribution for the non-key employees: --All contribution sources, as permitted by law, may be used to satisfy the required top-heavy minimum contribution. --The plan document does not limit the use of particular contributions for this purpose. --The contributions included in the following chart have already been deposited into the plan. EE comp elective contr catchup matching Key $200,000 $10,000 $5,000 $2,500 n/k $75,000 $1,500 $0 $375 n/k $60,000 $0 $0 $0 A. $3,675 B. $4,050 C. $5,025 D. $5,400 E. $10,050 |
A The minimum required top-heavy contribution is 3% of the total non-key compensation. To determine the amount to be deposited, the minimum required top-heavy contribution should be reduced by any employer contributions that are eligible to be used toward satisfying the requirement. The total non-key compensation is $135,000 ($75,000 + $65,000). $135,000 x 3% = $4,050. $4,050 –$375 in employer matching contributions = $3,675 to be deposited. The top-heavy minimum must be satisfied with employer contributions and/or forfeitures. Employer contributions include nonelective profit sharing contributions, pension contributions, matching contributions, QNECs, QMACs, safe harbor matching contributions and safe harbor nonelective contributions. Note that it is permissible for plan documents to limit the use of certain contributions for top heavy minimum purposes. For example, a plan sponsor may elect in the plan document that matching contributions are not to be used toward satisfying the top-heavy minimum. That is not the case in this particular example. |
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All of the following statements regarding aggregation for top-heavy purposes are TRUE, EXCEPT: A. A required aggregation group includes each plan of the employer in which at least one key employee participates. B. Plans that are not part of a required aggregation group must be tested separately for top-heavy purposes. C. A required aggregation group includes each plan of the employer that enables a plan with key employees to satisfy coverage testing under IRC §410(b). D. The top-heavy ratio for aggregated plans is calculated using values as of determination dates that fall within the same calendar year. E. A required aggregation group includes each plan of the employer that enables a plan with key employees to satisfy nondiscrimination testing under IRC §401(a)(4). |
B Two plans that are not part of a required aggregation group may be permissively aggregated. The purpose of permissive aggregation is to show that the combined plans are not top-heavy. |
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Based on the following information, determine the maximum number of HCEs that may benefit under Company S’s profit sharing plan and still satisfy the coverage requirements under IRC §410(b) ratio percentage test: --Company S has 240 employees, 20 of whom are HCEs. --Company S plan participants are entitled to an allocation of employer contributions if employed on the last day of the plan year and credited with at least 1,000 hours of service. --All employees of Company S satisfy the statutory eligibility requirements. --60 NHCEs complete less than 1,000 hours of service and are still employed on the last day of the plan year. --20 NHCEs terminate service during the plan year with fewer than 500 hours of service. --49 NHCEs terminate service during the plan year with more than 500 hours of service. A. 12 B. 13 C. 14 D. 15 E. 16 |
B Since all employees met the statutory eligibility requirements, no one is excluded from the ratio percentage test based on failure to satisfy eligibility requirements. However, those NHCEs who terminated employment with less than 500 hours of service are excludable because the plan has allocation requirements. There are 220 NHCEs in the plan (240 total employees – the 20 HCEs). 20 of these NHCEs are excludable from the ratio percentage test because they terminated employment with less than 500 hours of service are excludable. Thus, there are 200 nonexcludable NHCEs in the plan. 109 of these nonexcludable NHCEs failed to satisfy the allocation requirements (60 with less than 1,000 hours of service and 49 that terminated employment with more than 500 hours of service). Thus, there are 91 nonexcludable NHCEs benefiting. The NHCE ratio is 45.50% (91 benefiting NHCEs / 200 nonexcludable NHCEs). Since the NHCE ratio is 45.50%, only 65.00% of the nonexcludable HCEs may benefit to achieve a plan ratio percentage of 70%(45.50% NHCE ratio / 70% = 65.00% needed HCE ratio). 65% of the 20 HCEs equals 13 HCEs that may benefit under Company S’s profit sharing plan and still satisfy coverage requirements using the ratio percentage test. |
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Based on the following information, determine the minimum number of NHCEs that must benefit under the plan to satisfy the ratio percentage test under IRC §410(b): --ABC Company sponsors a profit sharing plan. --Plan eligibility requirements are age 21 and one year of service. --ABC Company would like to exclude a class of employees that work in a particular warehouse. --There are 10 nonexcludable HCEs of which 6 are benefiting under the plan. --There are 200 NHCEs of which 50 are under age 21 and another 50 have completed less than one year of service. A. 0 B. 6 C. 42 D. 70 E. 140 |
C The question provides the number of nonexcluable HCEs, but the number of nonexcludable NHCEs must be determined. Of the 200 total NHCEs, only 100 met the eligibility requirements (200 total NHCEs – 50 NHCEs under age 21 – 50 NHCEs with less than one year of service). The HCE ratio is 60% ( 6 benefiting HCEs / 10 nonexcludable HCEs). In order to pass the ratio percentage, 70% of the NHCEs, as compared to the percentage of HCEs must benefit. Since the HCE ratio is only 60%, only 42% of the nonexcludable NHCEs must benefit to achieve a plan ratio percentage of 70% ( 60% HCE ratio x 70% =42% needed NHCE ratio). 42% of the nonexcluable NHCEs is 42 (100 x 42%). |
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Which of the following is/are groups of employees that may be excluded by statute from the coverage testing group under IRC§410(b)? I. Employees who satisfy the plan's age and service requirements, but are ineligible due to a job category exclusion II. Employees who fail to satisfy the plan's age and service requirements III. Nonresident aliens who receive no US source income from the employer A. I only B. II only C. I and III only D. II and III only E. I, II and III |
D Employees who satisfy the plan's age and service requirements, but are ineligible due to a job category exclusion are included in the testing group as not benefiting. |
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All of the following groups of employees may be excluded by statute for coverage testing under IRC §410(b), EXCEPT: A. Seasonal employees who work only 6 months each year B. Nonresident aliens with no earned income from sources within the United States C. Employees covered by a collective bargaining agreement where retirement benefits are the subject of goodfaith bargaining D. Employees who do not satisfy the age and service requirements of the plan E. Nonbenefiting participants who terminated with fewer than 500 hours of service |
A Excludable employees are those that do not satisfy the plan’s age and service requirements, are not benefiting and terminate with 500 or fewer hours of service (provided the plan has allocation requirements to receive a contribution), are collectively bargained or are nonresident aliens. Seasonal employees are not excludable specifically by statute. |
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Which of the following statements regarding coverage testing under IRC §410(b) is/are TRUE? I. The average benefit test is part of the ratio percentage test. II. A plan that fails the ratio percentage test may correct the problem by expanding coverage so that the test is satisfied. III. If there are no NHCEs in the coverage testing group, the plan will fail to satisfy the coverage requirements. A. I only B. II only C. I and III only D. II and III only E. I, II, and III |
B There are two minimum coverage tests under IRC §410(b):the ratio percentage test and the average benefit test. The averagebenefit test is not part of the ratio percentage test. If there are no NHCEs in the coverage testing group, the plan is deemed to satisfycoverage for the plan year. However, if there is at least one NHCE in the coverage testing group, this rule does not apply |
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Which of the following statements regarding plan qualification under IRC §401(a) is/are TRUE? I. Coverage testing must be performed separately for the 401(k) portion, the 401(m) portion and the 401(a) portion. II. Employees who have not satisfied the plan’s age and service requirements for the portion being tested are included as not benefiting. III. The benefiting group includes only the employees who benefit under the disaggregated portion of the plan being tested. A. I only B. II only C. I and III only D. II and III only E. I, II, and III |
C Employees who have not satisfied the plan’s age and service requirements for the portion being tested are excluded from thecoverage testing for that portion of the plan |
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All of the following statements regarding correcting an IRC §410(b) coverage failure are TRUE, EXCEPT: A. Contribution amounts that have already been allocated may be adjusted and the contribution amount reallocated after a coverage failure has been identified. B. A coverage failure may be corrected by adopting a corrective amendment up to 9½ months after the close of the plan year. C. A coverage failure may be corrected by allocating a contribution to vested employees who terminated employment. D. One way to correct a coverage failure is to expand the group of NHCEs who benefit under the plan. E. A plan may correct a ratio percentage test failure by satisfying the average benefits test. |
A Corrective amendments for coverage failures may be made up to 9½ months after the close of the plan year. This is sometimes called an 11(g) amendment. Some acceptable ways to correct coverage issues are to expand the group of NHCEs benefiting or to increase allocations to NHCEs. This is permissible whether the NHCEs are actively employed or terminated. However, a plan may not redistribute allocations that have already been made. A plan that fails the ratio percentage test under IRC §410(b) may correct the failure by simply satisfying the average benefits test, if it is able. |
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Based on the following information, determine the ratio percentage under IRC §410(b): EE employee Excluded coverage benefiting HCE 10 1 9 9 NHCE 100 10 90 80 A. 70.00% B. 80.00% C. 80.91% D. 88.89% E. 100.00% |
D The NHCE ratio is the number of NHCEs benefiting divided by the total number of nonexcludable NHCEs in the coverage testing group (80 / 90 = 88.89%). The HCE ratio is the number of HCEs benefiting divided by the total number of nonexcludable HCEs in the coverage testing group (9 / 9 = 100.00%). The plan ratio percentage is the NHCE ratio divided by the HCE ratio (88.89% / 100.00% =88.89%). Note that the ratio percentage test is satisfied because the plan ratio percentage is at least 70%. |
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Based on the following information, determine the employer contribution allocation to Participant A: --The plan year end is December 31, 2015. --The plan is a money purchase pension plan with an allocation formula of 15% of eligible compensation. --Participant A earns $500,000 for the plan year. --This is the only plan maintained by the employer. --The IRC §401(a)(17) limit for 2015 is $265,000. A. $15,000 B. $39,750 C. $45,000 D. $63,750 E. $75,000 |
B Although, Participant A’s compensation for the plan year is $500,000, compensation for plan contribution purposes must be limited to$265,000 (the IRC §401(a)(17) compensation limit in effect for the 2015 plan year). The money purchase allocation is 15% of includable compensation, or $265,000 * .15 = $39,750 |
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All of the following statements regarding plan compensation used for a profit sharing allocation are TRUE, EXCEPT: A. The definition of compensation must be included in the plan document if the allocation is based on compensation. B. The definition of compensation must be the same as that used for calculating employer matching contributions. C. The definition of compensation may be IRC §414(s) compensation. D. The definition of compensation may exclude commissions. E. The definition of compensation may be IRC §415 compensation. |
B The plan may use different definitions of compensation for different plan purposes (e.g., matching allocations and profit sharing allocations). |
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All of the following are annual additions under IRC §415, EXCEPT: A. Catch-up contributions B. Forfeiture allocations C. Employer matching contributions D. After-tax employee contributions E. QNECs |
A IRC §415 limitations are applied to the annual additions allocated to the participant’s account for the limitation year. Annual additions are: • Employer contributions [including elective deferrals under a 401(k) plan, matching contributions and nonelective contributions]; • Forfeitures allocated to the participant’s account; and • Employee contributions (i.e., after-tax employee contributions). Loan repayments, investment earnings and catch-up contributions are not included in annual additions |
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Which of the following statements regarding excess annual additions under IRC §415 is/are TRUE? I. A failure to limit annual additions may cause the plan to be disqualified. II. A plan sponsor needs to use correction methods outlined in EPCRS to correct excess annual additions. III. There is no specific deadline for correcting excess annual additions. A. I only B. II only C. I and III only D. II and III only E. I, II and III |
E All of the statements regarding excess annual additions under IRC §415 are true |
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Which of the following statements regarding conditions for receiving an allocation of contributions under a qualified plan is/are TRUE? I. The hours-of-service requirement to receive an allocation of contributions may not exceed 1,000 hours. II. It is permissible for a plan to waive allocation requirements for a participant if the participant dies or becomes disabled during the plan year. III. Allocation conditions, such as the last-day rule or the 1,000-hour rule, may not be applied to a safe harbor nonelective contribution. A. I only B. II only C. I and III only D. II and III only E. I, II and III |
E All of the statements are true. The hours-of-service requirement to receive an allocation of contributions may be less than 1,000 hours, but may not exceed 1,000 hours. Plans are not required to waive allocation requirements for a participant that dies or becomes disabled during the plan year, but the plan may allow for such a waiver, if desired. No allocation conditions may be applied to a safe harbor nonelective or a safe harbor matching contribution. |
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All of the following statements regarding deduction deadlines are TRUE, EXCEPT: A. A calendar year corporation’s initial deduction deadline is March 15th. B. A calendar year sole proprietor’s initial deduction deadline is April 15th. C. A calendar year sole proprietor may extend the deduction deadline to December 31st. D. A calendar year corporation may extend the deduction deadline to September 15th. E. A calendar year partnership’s intial deduction deadline is April 15th. |
C The extended deadline for a sole proprietor is October 15 for a calendar year filer. |
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All of the following statements regarding compensation used for purposes of employer deduction limits are TRUE, EXCEPT: A. The maximum deductible contribution for a combination of money purchase and profit sharing plans is 25%of eligible plan compensation. B. Compensation is determined based on the employer’s tax year, even if different than the plan year. C. Compensation used for deduction purposes must be the same as compensation used for allocation purposes. D. Compensation for deduction purposes includes salary deferrals under an IRC §125 cafeteria plan. E. Elective deferrals to a 401(k) plan are not included as employer contributions when determining the totalcontributions subject to the deduction limit. |
C The way the plan defines compensation for allocation purposes does not affect the way compensation is determined for calculating the deduction limit. It is possible for the two compensation definitions to be the same, but it is not required. For deduction purposes,compensation is determined based on the employer’s tax year, even if different than the plan year. |
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Based on the following information, determine the maximum deductible contribution for the following profit sharing plan for 2015: --The plan was effective January 1, 2015. --The plan has a non integrated allocation formula. --The employer sponsors no other plans in 2015. --The IRC §401(a)(17) compensation limit in 2015 is $265,000. EE 2015 compensation President $350,000 Employee A $50,000 Employee B $30,000 A. $46,000 B. $51,000 C. $77,500 D. $86,250 E. $107,500 |
D The compensation limit in 2015 is $265,000. Total compensation for deduction purposes is $345,000 ($265,000 + 50,000 + 30,000).The maximum deductible contribution is $86,250 ($345,000 * 25%). |
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Which of the following statements regarding the excise tax on nondeductible contributions is/are TRUE? I. Payment of the excise tax may be extended by filing Form 5558 II. The employer is liable for any applicable excise tax on nondeductible contributions. III. The excise tax is due by the last day of the 9th month following the taxable year of the nondeductible contribution. A. I only B. II only C. I and III only D. II and III only E. I, II and III |
B The employer pays the excise tax due to nondeductible contributors by filing Form 5330. The due date for the excise tax is the last day of the 7th month following the taxable year for which there was a nondeductible contribution as of the close of the year. Form 5558 may be filed to extend this deadline by no more than six months. The extension does not apply to the payment of the tax, only to the filing deadline, so the tax due must be submitted with the extension request. |
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Based on the following information, determine Participant A’s vested percentage as of December 31, 2015: --The plan year and vesting computation period is the calendar year. --The plan uses the six-year graded vesting schedule. --The plan is using the counting hours method to determine vested service. --Participant A is a full-time employee. --Participant A was 60% vested as of December 31, 2013. --Participant A terminated employment on March 14, 2014. --Participant A was rehired on May 1, 2015. A. 20% B. 40% C. 60% D. 80% E. 100% |
D Based on a six-year graded vesting schedule, Participant A is 80% vested as of December 31, 2015. As of December 31, 2013 (the end of the plan year prior to terminating employment), Participant A was 60% vested. Participant A did not earn a year of vesting credit during 2014. As a full-time employee, Participant A would not have performed 1,000 hours of service between January 1, 2014 and March 14, 2014. It typically takes a full-time employee approximately six months to perform 1,000 hours of service. Participant A worked from May 1, 2015 through December 31, 2015. An eight month period is enough time for a full-time employee to work 1,000 hours. Thus, Participant A earned a year of vesting credit during 2015. The additional year raises Participant A’s vested percentage from 60% to 80%. |
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Based on the following information, determine the participant’s vested balance:The participant has not attained NRA.The participant met the plan’s eligibility requirement of one year of service.The plan is a nonsafe harbor 401(k) plan. year of vested service 2 plan vesting schedule 3-year elect contr account balance $10,000 ER matching balance $5,000 ER profit sharing balance $40,000 rollover account balance $4,000 A. $10,000 B. $14,000 C. $19,000 D. $54,000 E. $59,000 |
B With a three-year cliff vesting schedule, participants are 0% vested in their first two years and achieve 100% vested after three years of service. Since the participant has only two years of vested service, the participant is 0% vested in all employer contribution accounts. Elective contribution and rollover accounts are always 100% vested. Thus, the participant’s vested balance is $14,000($10,000 elective contribution balance + $4,000 rollover balance). |
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All of the following statements regarding vesting rules are TRUE, EXCEPT: A. Years of service prior to the effective date of the plan may be disregarded for vesting purposes. B. No years of service prior to attainment of age 21 may be disregarded for vesting purposes. C. Years of service prior to plan participation may not be disregarded for vesting purposes. D. Immediate vesting always satisfies minimum vesting schedules. E. The elapsed time method measures vesting periods of service instead of vesting computation periods. |
B Certain years of service may be disregarded for vesting purposes if specified in the plan. Years of service prior to age 18 and years of service prior to the effective date of the plan may be disregarded. Years of service performed after attaining age 18 and years of service prior to plan participation may not be disregarded for vesting purposes. |
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All of the following statements regarding breaks in service for vesting credit are TRUE, EXCEPT: A. A plan must credit an employee on unpaid maternity leave of absence with hours of service necessary to prevent a break in service in that year. B. A plan need not credit an employee on unpaid FMLA leave with hours of service necessary to prevent a break in service in that year. C. A plan may require a participant to complete a year of service following a break in service before counting service with the employer prior to the break. D. A plan need not credit an employee suspended for misconduct hours of service necessary to prevent a break in service. E. Years of service prior to a break in service may be disregarded for a non vested participant. |
B A plan must credit both employees on unpaid maternity leave and employees on unpaid FMLA leave with hours of service necessaryto prevent a break in service that year. However, a plan need not credit an employee suspended for misconduct hours of servicenecessary to prevent a break in service. Under the one-year break-in-service rule, if an employee incurs at least one break inservice, the plan may temporarily disregard the employee’s prior service. The employee will not receive credit for that prior serviceuntil after he or she completes another year of service. Under the rule of parity, years of service prior to a break in service may bedisregarded for a nonvested participant if certain conditions are met |
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Based on the following information, determine when a forfeiture is deemed to occur for Participant A: --The plan is a calendar year 401(k) plan that uses the five-year break-in-service rule for determining forfeitures. --Participant A terminated employment January 10, 2009. --Participant A has an accrued benefit and has not been paid out. A. December 31, 2009 B. December 31, 2010 C. December 31, 2012 D. December 31, 2013 E. December 31, 2014 |
D Participant A incurs five breaks in service as of December 31, 2013 (2009, 2010, 2011, 2012, 2013) and will incur a forfeiture at that time. |
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All of the following events require full vesting of a participant's benefit, EXCEPT: A. Becoming disabled, according to the plan’s definition B. Attainment of NRA under the plan C. Plan entry after satisfying a two-year eligibility requirement D. Complete discontinuance of employer contributions E. Completing seven years of service in a single employer plan |
A A plan is not required to provide for full vesting upon the total disability of a participant, although many plans do. |
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Based on the following information, determine the forfeiture allocation for Participant D for the 2015 plan year: --The plan is a calendar year profit sharing plan and is the only plan of the employer. --Forfeitures are allocated in proportion to compensation to participants who worked at least 1,000 hours in the plan year. --Participant B terminated on February 15, 2015. --Participant B was 40% vested with a total account balance of $6,250. --Participant B received a lump sum distribution of $2,500 in October, 2015. --The plan is not top-heavy and satisfies coverage requirements. EE hours worked compensation A 2,040 $200,000 B 350 $30,000 A. $352 B. $482 C. $527 D. $804 E. $878 |
C Participant B’s total account balance was $6,250. Participant B’s distribution of $2,500 represents 40% of Participant B’s total account balance. The remaining 60% of Participant B’s account balance is $3,750 ($6,250 - $2,500). Participant B is not eligible for an allocation. The remaining compensation totals $320,000 ($200,000 + $40,000 + $45,000 +$35,000). The allocation to Participant D is ($45,000 / $320,000) x $3,750 = $527. |
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Based on the following information, determine the amount forfeited by Participant A: --Participant A terminated employment 2 years ago. --Participant A was 60% vested. --Participant A took a distribution of his entire vested balance in the current plan year. --Participant A’s account balance at the time of distribution was as follows: Source balance After-tax EE contribution $2,000 Profit-sharing $32,000 A. $12,800 B. $13,600 C. $14,800 D. $19,200 E. $20,400 |
A After-tax employee contributions are always 100% vested and are not forfeitable. Thus, only Participant A’s profit sharing account balance is subject to vesting. Participant A was 60% vested in his $32,000 account balance ($32,000 * 60% = $19,200). The remaining 40% of Participant A’s balance is forfeited ($32,000 * 40% = $12,800). |
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Which of the following statements regarding vesting schedules is/are TRUE? I. Three-year graded (33.3% each year) satisfies statutory minimum vesting standards for a defined contribution plan. II. Six-year graded satisfies statutory minimum vesting standards for a defined contribution plan. III. Three-year cliff vesting satisfies statutory minimum vesting standards for a defined contribution plan. A. I only B. II only C. I and III only D. II and III only E. I, II, and III |
E A defined contribution plan may satisfy the legal vesting requirements for employer contributions under one of two statutory minimum schedules: three-year cliff vesting or six-year graded vesting. A plan may also design a customized cliff or graded vesting schedule,provided that participants are no less vested at any point in time than they would be under the statutory cliff or graded vesting schedules. A plan may also design a customized cliff or graded vesting schedule, provided that participants are no less vested at any point in time than they would be under the statutory cliff or graded vesting schedules. |
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Which of the following statements regarding remedial amendment periods is/are TRUE? I. The remedial amendment period allows practitioners a period of time to update the plan document to reflect current plan operations due to law changes. II. Amendments that are required by law may be made retroactively during the remedial amendment period. III. Remedial amendment periods do not apply to a newly established plan. A. I only B. III only C. I and II only D. II and III only E. I, II and III |
C Remedial amendment periods do apply when a new plan is adopted or amended. These remedial amendment periods permit the plan sponsor to submit the plan to the IRS for favorable determination letter and, if the IRS requires modifications to the plan or amendment language, to make those changes retroactively. |
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All of the following statements regarding protected benefits under IRC §411(d)(6) are TRUE, EXCEPT: A. An optional form of benefit is any option that relates to the form or timing of a plan distribution. B. A plan is not required to protect the optional forms of benefit with respect to a rollover contribution. C. Rights and features that are not optional forms of benefit are not protected benefits. D. All optional forms of benefit are protected benefits. E. Ancillary benefits that are not optional forms of benefit are not protected benefits. |
D Not all optional forms of benefit are protected benefits. For example, annuity options may be eliminated anytime from a profit sharing plan or stock bonus plan without violating the anti-cutback rules. |
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All of the following statements regarding defined contribution plan terminations are TRUE, EXCEPT: A. Top-heavy minimum allocations will continue to accrue after the plan termination date until the final distribution of plan assets. B. The employer must establish a date of plan termination. C. A pension plan is required to provide affected participants an ERISA §204(h) notice regarding a plan termination. D. A pension plan should have a legitimate business reason for terminating within ten years of implementation. E. Form 5310 is used to request a determination letter upon plan termination. |
A Top-heavy minimums are not required after the plan termination date, but any minimum contribution liabilities that accrued as of the termination date, but have not been funded must be satisfied. |
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Which of the following statements regarding ERISA §204(h) notices is/are TRUE? I. A small plan is required to give the ERISA §204(h) notice no fewer than 30 days before the effective date of the ERISA §204(h)amendment. II. A 401(k) plan is not subject to the ERISA §204(h) notice requirements. III. An ERISA §204(h) notice must be provided to all plan participants and beneficiaries. A. I only B. II only C. I and II only D. II and III only E. I, II and III |
B An ERISA §204(h) notice is due no fewer than 15 days before the effective date of the amendment for a small plan filer. It is only required to be provided to all applicable individuals (defined as each participant whose future rate of accrual is reasonably expected to be significantly reduced). |
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All of the following statements regarding Form 5500 audit requirements are TRUE, EXCEPT: A. An accountant would be considered independent of the plan if the accountant is a fiduciary of the plan. B. An accountant would not be considered independent of the plan if the accountant is a service provider for the plan. C. The accountant should consider whether benefit payments were made in accordance with plan terms. D. For any year in which the plan has large plan filing status, a written opinion of an independent qualified public accountant must accompany the 5500 filing. E. The audit requirement also applies to a small plan filer, unless certain conditions are satisfied. |
A Plan audits must be performed by a qualified public accountant who is independent of the plan. As a general rule, an accountant would not be independent of the plan if the accountant is a service provider, fiduciary or participant in the plan. The accountant also must be independent of the plan sponsor. This means the accountant does not have a financial interest in the plan sponsor nor is an employee of the plan sponsor. |
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Which of the following is/are included in a Form 5500 filing for a large plan filer only?I. Schedule CII. Schedule GIII. Schedule H A. I only B. II only C. I and III only D. II and III only E. I, II and III |
E Where applicable, Schedules C, G and H are included a Form 5500 filing for large plan filers only. These Schedules are not required for small plan filers. |
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All of the following are requirements a plan must meet in order to qualify for filing Form 5500-SF, EXCEPT: A. The plan must cover fewer than 100 participants as of the first day of the plan year. B. The plan must meet eligibility requirements for the small plan audit waiver on the basis of qualifying assets. C. The plan must invest at least 95 percent of plan assets in investments that have a readily ascertainable fair market value. D. The plan may hold no employer securities at any time during the plan year. E. The plan may not be a multi employer plan. |
C In order to qualify for filing Form 5500-SF, the plan must invest 100 percent of its assets in investments that have a readily ascertainable fair market value. The other statements regarding requirements a plan must meet in order to qualify for filing Form 5500-SF are true. The plan must cover fewer than 100 participants as of the first day of the plan year, it must meet eligibility requirements for the small plan audit waiver on the basis of qualifying assets, it may hold no employer securities at any time during the plan year and it may not be amultiemployer plan. |
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Which of the following statements regarding Form 5500 filing requirements is/are TRUE? I. Form 5500 Schedule C is required for any large plan filer that changes the actuarial firm during the year. II. A one-participant owner plan with $500,000 of plan assets is not required to file Form 5500. III. SEP plans are generally exempt from Title I Form 5500 reporting requirements. A. I only B. II only C. I and III only D. II and III only E. I, II and III |
C No 5500 filing is required for a one-participant owner plan with assets of $250,000 or less as of the end of the plan year. A oneparticipantowner plan with $500,000 of plan assets will likely qualify for the simplified reporting requirements of Form 5500-EZ, but isnot exempt from 5500 filing requirements altogether |
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All of the following statements regarding the filing deadlines for Form 5500 for tax years ending prior to December 31, 2015 are TRUE, EXCEPT: A. Form 5500, without extension, is due January 15th for plan year ending June 30th. B. Form 5500, with extension, is due October 15th for plan year ending December 31st. C. Form 5500, without extension, is due June 30th for plan year November 30th. D. Form 5500, without extension, is due August 31st for terminated plan with final assets distributed on January 10th. E. Form 5500, with extension, is due August 15th for plan year ending October 31st. |
A The filing deadline for the Forms 5500, 5500-SF and 5500-EZ is the last day of the seventh month following the close of the plan year. Thus, for a plan year ending June 30th, Form 5500, without extension, is due January 31st. The maximum extension is 2½months. For a terminated plan, the date on which final distribution of assets occurs ends the plan year for reporting purposes,creating a short plan year. The return is due on the last day of the seventh calendar month following that date, unless an extension is granted. Note: Effective for tax years beginning after December 31, 2015, the Form 5500 maximum extension deadline has been expanded from a 2½ month extension to a 3½ month period. That means for calendar plan years, beginning with the 2016 Form 5500 filing, the maximum filing deadline will move from October 15, 2017 to November 15, 2017. |
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Based on the following information, determine the latest date for filing the Form 5500: --The plan year begins June 1, 2014 and ends May 31, 2015. --Form 5558 has been filed timely. A. August 15, 2015 B. December 31, 2015 C. February 15, 2016 D. March 15, 2016 E. April 15, 2016 |
D The filing deadline for the Forms 5500, 5500-SF and 5500-EZ is the last day of the seventh month following the close of the plan year. The maximum extension is 2½ months. Thus, for a plan year ending May 31st, Form 5500, with extension, is due March 15th. Note: Effective for tax years beginning after December 31, 2015, the Form 5500 maximum extension deadline has been expandedfrom a 2½ month extension to a 3½ month period. That means for calendar plan years, beginning with the 2016 Form 5500 filing, themaximum filing deadline will move from October 15, 2017 to November 15, 2017. |
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Which of the following statements regarding fidelity bonds is/are TRUE? I. ERISA requires every person who handles plan funds be bonded by a fidelity bond. II. The DOL permits the plan to purchase a fidelity bond with plan assets. III. The fidelity bond must name the plan as the insured. A. I only B. II only C. I and III only D. II and III only E. I, II and III |
E All of the statements regarding fidelity bonds are true. Every person who handles plan funds must be bonded by a fidelity bond. It ispermissible to use plan assets to purchase a fidelity bond. The plan is listed as the insured on the fidelity bond |
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Which of the following actions is/are violations of the ASPPA Code of Professional Conduct? I. Performing a client's ADP test in a careless manner without gathering sufficient data. II Being convicted of a misdemeanor due to traffic violation III. Providing a plan amendment to a client after December 31, knowing that the client intends to back date the document A. I only B. II only C. I and III only D. II and III only E. I, II and III |
C Performing work for a client in a careless manner without gathering sufficient data is a violation of the professional integrity portion of ASPPA’s Code of Professional Conduct which states that an ASPPA member shall perform professional services with honesty,integrity, skill and care. Although not advised, being found guilty of a misdemeanor that is not financially-related does not violate ASPPA’s Code of Professional Conduct. Pleading guilty or being found guilty of any financially-related misdemeanor or any felony (regardless of the nature of the crime) is a violation of the professional integrity portion of ASPPA’s Code of Professional Conduct. Providing a documentation to a client with knowledge that the client intends to back date the document is a violation of the “control ofwork product” portion of ASPPA’s Code of Professional Conduct which states that an ASPPA member shall not perform professionalservices when the member has reason to believe that they may be used to violate or evade the law |
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Which of the following actions is/are acceptable in accordance with the ASPPA Code of Professional Conduct? I. Recommending that a client change the profit sharing allocation formula in a plan that is administered by another firm II. Discussing a specific participant's investment elections with an unrelated investment advisor III. Discussing with a client the fees paid by other clients that the ASPPA member services A. I only B. II only C. I and III only D. II and III only E. I, II, and III |
A Discussing a specific participant's investment elections with an unrelated investment advisor is a violation of the participant’s confidentiality if the participant has not given permission for you to discuss the information with the unrelated investment advisor. Discussing with a client the fees paid by other clients that the ASPPA member services is a violation of one client’s confidentiality if that client has not given permission for you to discuss the information with another client. |
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All of the following statements regarding ASPPA’s Code of Professional Conduct are TRUE, EXCEPT: A. An ASPPA member may perform professional service involving a potential conflict of interest if certain conditions are satisfied. B. The ASPPA Code of Professional Conduct must be prominently displayed in each ASPPA member’s office. C. An ASPPA member may use membership titles and credentials only in accordance with ASPPA’s Code of Professional Conduct. D. An ASPPA member may provide opinions and advice only when qualified based on education, training or experience. E. An ASPPA member must disclose to a client all sources of direct or indirect compensation received with respect to services performed for such client. |
B ASPPA members are not required to display the ASPPA Code of Professional Conduct in their offices |
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Which of the following statements regarding ASPPA’s Code of Professional Conduct is/are TRUE? I. Working for clients who have conflicting interests may be acceptable under ASPPA's Code of Professional Conduct if certain conditions are satisfied. II. Precautions should be taken to ensure that professional communications are appropriate to the circumstances and the intended audience. III. Refusing to provide conversion data to a client's new service provider violates ASPPA's Code of Professional Conduct. A. I only B. III only C. I and II only D. II and III only E. I, II and III |
E Working for clients who have conflicting interests is acceptable if the member’s ability to act fairly is unimpaired, full disclosure is made and both clients agree to continue the relationship. Refusing to provide conversion data to a client's new service provider is a violation of the “courtesy and cooperation” portion of ASPPA’s Code of Professional Conduct. |
