Question 1

Plan termination rules apply and procedures apply to all types of pension plans. (Qualified Plans)

Accepted Answer

A) True 
 B)False

Question 2

Part time workers are employed to save on costs of benefits. (Trends in Retirement Plan Coverage Costs)

Accepted Answer

A) True 
 B)False

Question 3

Pension plans do not automatically fulfill the nondiscrimination requirement if they fall in safe harbors. (Qualified Plans)

Accepted Answer

A) True 
 B)False

Question 4

Usually,cash balance plans are less costly to employers than defined benefit plans. (Cash Balance Plans and Pension Equity Plans)

Accepted Answer

A) True 
 B)False

Question 5

Public organizations may offer both 40l(k)and 403(b)plans,but private tax-exempt organizations are prohibited from offering 401(k)plans. (Section 403(b)Tax-Deferred Annuity Plans)

Accepted Answer

A) True 
 B)False

Question 6

These two are the basic accrual rules for the nondiscrimination testing for defined contribution plans. (Defined Contribution Plans)

Accepted Answer

A)  Contributions cannot be reduced based on age, no maximum age limit for discontinuing contributions
B)  Contributions can be reduced based on age if everyone in the plan is affected, age, no maximum age limit for discontinuing contributions
C)  Contributions can be reduced based on age if everyone in the plan is affected, no minimum age limit for discontinuing contributions
D)  Contributions can be increased based on age, no maximum age limit for discontinuing contributions

Question 7

IRC Section 403(b)established the tax-deferred annuity program as a qualified contribution plan under ERISA guidelines. (Section 403(b)Tax-Deferred Annuity Plans)

Accepted Answer

A) True 
 B)False

Question 8

The present value of benefits based on a designated date is known as accumulated benefit obligation. (Defined Benefit Plans)

Accepted Answer

A) True 
 B)False

Question 9

Discuss the controversies related with cash balance retirement plans. (Controversy Surrounding Cash Balance Plans)

Accepted Answer

Main Points
● Age-related treatment
● Ar...

Question 10

Using the ratio percentage test for tax benefit qualification,what does the percentage of nonhighly compensated employees to highly compensated employees in the plan have to be? (Qualified Plans)

Accepted Answer

A)  30%
B)  70%
C)  60%
D)  40%

Question 11

Using the unit benefit formula,the annual benefits are based on age,years of service and final average wages or salary. (Defined Benefit Plans)

Accepted Answer

A) True 
 B)False  True

Question 12

Nearly 55% of workers employed in the private sector participated in some form of retirement plan in 2011. (Trends in Retirement Plan Coverage Costs)

Accepted Answer

A) True 
 B)False

Question 13

The Revenue Act of 1921 led to the increase in discretionary benefits such as pensions. (Origins of Employer-Sponsored Retirement Benefits)

Accepted Answer

A) True 
 B)False  True

Question 14

Companies establish retirement plans following one of these three design configurations. (Introduction)

Accepted Answer

A)  Defined benefit, defined contribution, hybrid
B)  Qualified benefit, qualified contribution, hybrid
C)  Qualified benefit, nonqualified benefit, hybrid
D)  Funded, unfunded, hybrid

Question 15

Similar numbers of union and nonunion workers had access to a retirement plans as of 2011. (Trends in Retirement Plan Coverage Costs)

Accepted Answer

A) True 
 B)False

Question 16

What is the 3% rule used to determine? (Defined Benefit Plans)

Accepted Answer

A)  Nondiscrimination in defined benefits plans
B)  Nondiscrimination in defined contribution plans
C)  Tax benefit qualification for defined benefits plans
D)  Tax benefit qualification for defined contribution plans

Question 17

The IRC limit on maximum annual benefit is indexed for inflation in $7000 increments each year beginning after 2006. (Defined Benefit Plans)

Accepted Answer

A) True 
 B)False

Question 18

Which one of these is not a defined contribution plan? (Types of Defined Contribution Plans)

Accepted Answer

A)  Cash balance plan
B)  ESOPs
C)  SIMPLE
D)  Profit sharing A

Question 19

Which of the following are characteristics of the flat benefit formula used in defined benefits plans? (Defined Benefit Plans)

Accepted Answer

A)  An employee's years of service are considered, is determined using a flat amount formula or a flat percentage formula, the benefit is based on a percentage of the employees final average wage or salary
B)  Is determined using a flat amount formula or a flat percentage formula an employee's years of service are considered, the benefit is based on a percentage of the employees final average wage or salary, is based on the employee's last 3-4 years of service
C)  Is based on the employee's last 3-4 years of service an employee's years of service are considered, The benefit is based on a percentage of the employees final average wage or salary, an employee's years of service are considered
D)  The benefits are based on a percentage of the employees final average wage or salary, are based on the employee's last 3-4 years of service and are determined using a flat amount formula or a flat percentage formula

Question 20

In nonleveraged ESOPs,the company borrows money from a financial institution to purchase company stock. (Employee Stock Option Plans (ESOPs))

Accepted Answer

A) True 
 B)False

Exam 4: Employer-Sponsored Retirement Plans

Plan termination rules apply and procedures apply to all types of pension plans. (Qualified Plans)

Correct AnswerverifiedShow Answer

Part time workers are employed to save on costs of benefits. (Trends in Retirement Plan Coverage Costs)

Correct AnswerverifiedShow Answer

Pension plans do not automatically fulfill the nondiscrimination requirement if they fall in safe harbors. (Qualified Plans)

Correct AnswerverifiedShow Answer

Usually,cash balance plans are less costly to employers than defined benefit plans. (Cash Balance Plans and Pension Equity Plans)

Correct AnswerverifiedShow Answer

Public organizations may offer both 40l(k)and 403(b)plans,but private tax-exempt organizations are prohibited from offering 401(k)plans. (Section 403(b)Tax-Deferred Annuity Plans)

Correct AnswerverifiedShow Answer

These two are the basic accrual rules for the nondiscrimination testing for defined contribution plans. (Defined Contribution Plans)

Correct AnswerverifiedShow Answer

IRC Section 403(b)established the tax-deferred annuity program as a qualified contribution plan under ERISA guidelines. (Section 403(b)Tax-Deferred Annuity Plans)

Correct AnswerverifiedShow Answer

The present value of benefits based on a designated date is known as accumulated benefit obligation. (Defined Benefit Plans)

Correct AnswerverifiedShow Answer

Discuss the controversies related with cash balance retirement plans. (Controversy Surrounding Cash Balance Plans)

Correct AnswerverifiedMain Points● Age-related treatment● Ar...View AnswerShow Answer

Using the ratio percentage test for tax benefit qualification,what does the percentage of nonhighly compensated employees to highly compensated employees in the plan have to be? (Qualified Plans)

Correct AnswerverifiedShow Answer

Using the unit benefit formula,the annual benefits are based on age,years of service and final average wages or salary. (Defined Benefit Plans)

Correct AnswerverifiedTrue

Nearly 55% of workers employed in the private sector participated in some form of retirement plan in 2011. (Trends in Retirement Plan Coverage Costs)

Correct AnswerverifiedShow Answer

The Revenue Act of 1921 led to the increase in discretionary benefits such as pensions. (Origins of Employer-Sponsored Retirement Benefits)

Correct AnswerverifiedTrue

Companies establish retirement plans following one of these three design configurations. (Introduction)

Correct AnswerverifiedShow Answer

Similar numbers of union and nonunion workers had access to a retirement plans as of 2011. (Trends in Retirement Plan Coverage Costs)

Correct AnswerverifiedShow Answer

What is the 3% rule used to determine? (Defined Benefit Plans)

Correct AnswerverifiedShow Answer

The IRC limit on maximum annual benefit is indexed for inflation in $7000 increments each year beginning after 2006. (Defined Benefit Plans)

Correct AnswerverifiedShow Answer

Which one of these is not a defined contribution plan? (Types of Defined Contribution Plans)

Correct AnswerverifiedA

Which of the following are characteristics of the flat benefit formula used in defined benefits plans? (Defined Benefit Plans)

Correct AnswerverifiedShow Answer

In nonleveraged ESOPs,the company borrows money from a financial institution to purchase company stock. (Employee Stock Option Plans (ESOPs))

Correct AnswerverifiedShow Answer

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Main Points
● Age-related treatment
● Ar...
View Answer

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True

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True

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A

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