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20 Cards in this Set
- Front
- Back
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A pension plan may permit in‐service withdrawals prior to age 59½. |
No a pension plan does not permit in-service withdrawals prior to age 62 (they need to be NRA, 62, to be able to withdrawal) |
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A SIMPLE IRA plan must have a calendar plan year. |
yes SIMPLE IRA plans must have a calendar plan year |
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A SEP is available only to individuals. |
NO SEP is an employer-sponsored plan (and employer offers to employees.) *individual plan are IRAs |
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Participant loans are permitted in a SIMPLE 401(k) plan. |
Yes |
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A target benefit plan is a non-pension plan. |
NO a target benefit plan is a Pension Plan Pension Plan can be defined contribution plans (Money Purchase, and Target benefit plans) or Defined Benefit (straight pension). Non-Pension plans are Defined contribution plans (profit Sharing and stock Bonus Plans) |
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An employer bears the investment risk in a defined contribution plan. |
NO, the employee bears the investment risk in a DC plan. an employer bears investment risk in DB plans. |
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A pension plan must have definitely determinable benefits. |
Yes |
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A SEP may have a vesting schedule. |
NO all contributions to an SEP plan are 100% vested and non-forfeitable. |
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A 401(k) plan is a nonpension plan. |
YES |
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A stock bonus plan may include a 401(k) arrangement. |
YES |
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Which of the following statements regarding types of defined contribution plansis/are TRUE? I. An employee bears the investment risk in a defined contribution plan. II. A money purchase plan is a nonpension plan. III. A stock bonus plan may include a 401(k) component. A. I only B. II only C. I and III only D. II and III only E. I, II and III |
C A money purchase plan is a defined contribution plan that is classified as a pension plan. |
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Pension plans may permit distributions upon all of the following events, EXCEPT: A. Death B. Hardship C. Disability D. Retirement E. Termination of employment |
B Pension plans may not permit hardship withdrawals. |
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Which of the following statements regarding types of defined contribution plansis/are TRUE? I. A target benefit plan is a defined contribution plan. II. An ESOP is designed to invest primarily in employer stock. III. A profit sharing plan is a nonpension plan. A. I only B. II only C. I and III only D. II and III only E. I, II and III |
E All three statements are true. Pension Plan can be defined contribution plans (Money Purchase, and Target benefit plans) or Defined Benefit (straight pension). Non-Pension plans are Defined contribution plans (profit Sharing and stock Bonus Plans) |
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All of the following statements regarding profit sharing plans are TRUE, EXCEPT: A. An employer is required to have profits to make a profit sharing contribution. B. Profit sharing plans are required to have recurring and substantial contributions. C. A definite allocation formula is required in a profit sharing plan. D. A definite contribution formula is not required in a profit sharing plan. E. Nonprofit organizations may adopt a profit sharing plan. |
A An employer is not required to have profits to contribute to a profit sharing plan,unless the plan document requires so expressly. |
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Which of the following types of plans are generally required to file Form 5500? I. Money purchase plan II. SIMPLE 401(k) plan III. SEP
A. I only B. III only C. I and II only D. II and III only E. I, II and III |
C A SEP is not required to file Form 5500 if certain conditions are met. |
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All of the following statements regarding defined contribution plans are TRUE,EXCEPT: A. A profit sharing plan may use forfeitures to reduce employer contributions. B. A money purchase plan is subject to minimum funding requirements under IRC§412. C. A profit sharing plan may be exempt from QJSA requirements. D. Employer contributions are discretionary in a SIMPLE 401(k) plan. E. A SEP is subject to full and immediate vesting of employer contributions. |
D Employer contributions are mandatory in a SIMPLE 401(k) plan. |
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Which of the following plans is/are considered pension plans? I. Money purchase plan II. Stock bonus plan III. Target benefit plan A. I only B. II only C. I and III only D. II and III only E. I, II and III |
C A stock bonus plan is a nonpension plan. |
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All of the following statements regarding SIMPLE plans are TRUE, EXCEPT: A. SIMPLE IRAs may allow for catch‐up contributions. B. SIMPLE 401(k) plans may allow for catch‐up contributions. C. SIMPLE IRAs do not have to file a Form 5500. D. Participant loans may be available in SIMPLE IRAs. E. Participant loans may be available in SIMPLE 401(k) plans. |
D Participant loans are not permitted in SIMPLE IRAs. SIMPLE plans can: 1.allow catch up contribution, both for IRA and SIMPLE 401 (K) 3. loans are allowed only on SIMPLE 401 (k) plans |
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Which of the following statements regarding money purchase plans is/are TRUE? I. They must provide a fixed contribution formula II. They are required to provide a QJSA as a distribution option III. They may not include a 401(k) feature A. I only B. III only C. I and II only D. II and III only E. I, II and III |
E All of the statements are true. money purchase plans: 1.must provide a fixed contribution (since its a pension plan) 2.they are required to provide a QJSA (all pension plans are required, no exceptions) 3.they may not include 401 (k) feature |
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All of the following statements regarding the differences between pension plans and nonpension plans are TRUE, EXCEPT: A. Pension plans may qualify for an exemption from the QJSA rules. B. Only nonpension plans may include a 401(k) arrangement. C. The minimum funding requirements of IRC §412 apply to pension plans. D. The definitely determinable benefit requirement is applied solely to pensionplans. E. The permissible distribution events are different for pension plans and nonpension plans. |
A no exemption for pension plans on QJSA rule, they have to provide it. |
