Question 1

Under a defined contribution plan,ERISA requires that a fiduciary be named.List the responsibilities of the fiduciary (Defined Contribution Plans)

Accepted Answer

Main Points 
-Fiduciary responsibilities include: 
-Acting solely in the interest of plan participants and their beneficiaries and with the exclusive purpose of providing benefits to them 
-Carrying out their duties prudently 
-Following the plan documents (unless inconsistent with ERISA)
-Diversifying plan investments 
-Paying only reasonable plan expenses 
-The duty to act prudently is a central responsibility under ERISA
 -Prudence focuses on the process for making fiduciary decisions

Question 2

Employers can take tax deductions on qualified plans.(Qualified vs.Nonqualified Plans)

Accepted Answer

A) True 
 B)False  True

Question 3

Accrual rules specify the rate participants can accumulate benefits.(Qualified vs.Nonqualified Plans)

Accepted Answer

A) True 
 B)False  True

Question 4

Briefly discuss the origins and trends in retirement plans in the US.(Defining Retirement Plans)

Accepted Answer

Main Points 
● According to Employee Ben

Question 5

Defined contribution plans guarantee particular benefit amounts to participating employees.(Defined Contribution Plans)

Accepted Answer

A) True 
 B)False

Question 6

A salary reduction agreement refers to the annual maximum allowable contribution to a participant's account in a defined contribution plan.(Defined Contribution Plans)

Accepted Answer

A) True 
 B)False

Question 7

This type of hybrid plan is based on income and years of service,uses individual accounts,passes the IRS's cross-testing rules and the total benefits are based on the investment performance of the plan's assets.(Target Benefit Plans)

Accepted Answer

A) Target benefit plan 
B) Money purchase plan 
C) Age-weighted profit sharing plan 
D) Cash balance plan 
A) Target benefit plan 
B) Money purchase plan 
C) Age-weighted profit sharing plan 
D) Cash balance plan

Question 8

The Revenue Act of 1921 instituted retirement plans as a mandatory bargaining subject between unions and management.(Origins of Employer-Sponsored Retirement Benefits)

Accepted Answer

A) True 
 B)False

Question 9

Top-heavy provisions ensure minimum benefits for key employees.(Qualified vs.Nonqualified Plans)

Accepted Answer

A) True 
 B)False

Question 10

Discuss the controversies related with cash balance retirement plans.(Concerns about Cash Balance Plans)

Accepted Answer

Main Points 
● Age-related treatment 
●

Question 11

Employers establish qualified plans when all of the ERISA minimum standards are met.Failure to meet at least one minimum standard results in a plan becoming disqualified.List as many ERISA minimum standards as you can remember and explain the main advantage of offering qualified plans.(Qualified vs.Nonqualified Plans)

Accepted Answer

Main Points 
-The Internal Revenue Code

Question 12

There are three possible contribution sources for defined contribution plans.Which of the following is not one of those sources? (Defined Contribution Plans)

Accepted Answer

A) Social Security integration 
B) Employer contributions 
C) Forfeitures 
D) Employee contributions 
A) Social Security integration 
B) Employer contributions 
C) Forfeitures 
D) Employee contributions

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a tax benefit associated with 401(k)plans? (401(k)Plans)

Accepted Answer

A) Employees pay taxes on their contribution 
B) Employees do not pay taxes on their contributions 
C) Investment gains are taxed 
D) Employees cannot deduct their contributions from taxable income 
A) Employees pay taxes on their contribution 
B) Employees do not pay taxes on their contributions 
C) Investment gains are taxed 
D) Employees cannot deduct their contributions from taxable income

Question 15

Service industries such as retail and food service are not capital intensive,and most have the reputation of paying low wages and offering less generous benefits,including retirement plans.(Trends in Retirement Plan Coverage and Costs)

Accepted Answer

A) True 
 B)False

Question 16

Savings Incentive Match Plans for Employees (SIMPLEs)can be either leveraged or nonleveraged.(Savings Incentive Match Plans for Employees (SIMPLEs))

Accepted Answer

A) True 
 B)False

Question 17

This type of hybrid plan defines benefits for each employee by reference to the amount of the employee's hypothetical account balance.(Cash Balance Plans and Pension Equity Plans)

Accepted Answer

A) Money purchase plan 
B) Target benefit plan 
C) Cash balance plan 
D) Pension equity plan 
A) Money purchase plan 
B) Target benefit plan 
C) Cash balance plan 
D) Pension equity plan

Question 18

The Pension Benefit Guarantee Corporation recognizes three types of plan terminations: distress terminations,involuntary terminations,and standard terminations.(Defined Contribution Plans)

Accepted Answer

A) True 
 B)False

Question 19

Capital-intensive businesses require highly capable employees who have the aptitude to learn how to use complex physical equipments such as casting machines and robotics.(Trends in Retirement Plan Coverage and Costs)

Accepted Answer

A) True 
 B)False

Question 20

Retirement benefits are generally distributed in one of these three ways.(Qualified vs.Nonqualified Plans)

Accepted Answer

A) Backloading,collateral payments,offset approach 
B) Periodic payments,lumps sums collateral payments 
C) Annuities,lumps sums offset payments 
D) Lumps sums,annuities,periodic payments 
A) Backloading,collateral payments,offset approach 
B) Periodic payments,lumps sums collateral payments 
C) Annuities,lumps sums offset payments 
D) Lumps sums,annuities,periodic payments

Under a defined contribution plan,ERISA requires that a fiduciary be named.List the responsibilities of the fiduciary (Defined Contribution Plans)

Employers can take tax deductions on qualified plans.(Qualified vs.Nonqualified Plans)

Accrual rules specify the rate participants can accumulate benefits.(Qualified vs.Nonqualified Plans)

Briefly discuss the origins and trends in retirement plans in the US.(Defining Retirement Plans)

Defined contribution plans guarantee particular benefit amounts to participating employees.(Defined Contribution Plans)

A salary reduction agreement refers to the annual maximum allowable contribution to a participant's account in a defined contribution plan.(Defined Contribution Plans)

This type of hybrid plan is based on income and years of service,uses individual accounts,passes the IRS's cross-testing rules and the total benefits are based on the investment performance of the plan's assets.(Target Benefit Plans)

The Revenue Act of 1921 instituted retirement plans as a mandatory bargaining subject between unions and management.(Origins of Employer-Sponsored Retirement Benefits)

Top-heavy provisions ensure minimum benefits for key employees.(Qualified vs.Nonqualified Plans)

Discuss the controversies related with cash balance retirement plans.(Concerns about Cash Balance Plans)

There are three possible contribution sources for defined contribution plans.Which of the following is not one of those sources? (Defined Contribution Plans)

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

Which of the following is a tax benefit associated with 401(k)plans? (401(k)Plans)

Service industries such as retail and food service are not capital intensive,and most have the reputation of paying low wages and offering less generous benefits,including retirement plans.(Trends in Retirement Plan Coverage and Costs)

Savings Incentive Match Plans for Employees (SIMPLEs)can be either leveraged or nonleveraged.(Savings Incentive Match Plans for Employees (SIMPLEs))

This type of hybrid plan defines benefits for each employee by reference to the amount of the employee's hypothetical account balance.(Cash Balance Plans and Pension Equity Plans)

The Pension Benefit Guarantee Corporation recognizes three types of plan terminations: distress terminations,involuntary terminations,and standard terminations.(Defined Contribution Plans)

Capital-intensive businesses require highly capable employees who have the aptitude to learn how to use complex physical equipments such as casting machines and robotics.(Trends in Retirement Plan Coverage and Costs)

Retirement benefits are generally distributed in one of these three ways.(Qualified vs.Nonqualified Plans)

Introducing Employee Benefits

The Psychology and Economics of Employee Benefits

Regulating Employee Benefits

Employer-Sponsored Health-Care Plans

Employer-Sponsored Disability Insurance, life Insurance, and Workers Compensation

Government-Mandated Social Security Programs

Paid Time-Off and Flexible Work Schedule Benefits

Accommodation and Enhancement Benefits

Managing the Employee-Benefits System

Nonqualified Deferred Compensation Plans for Executives

Global Employee Benefits at a Glance

Filters

Exam 4: Employer-Sponsored Retirement Plans

Under a defined contribution plan,ERISA requires that a fiduciary be named.List the responsibilities of the fiduciary (Defined Contribution Plans)

Employers can take tax deductions on qualified plans.(Qualified vs.Nonqualified Plans)

Accrual rules specify the rate participants can accumulate benefits.(Qualified vs.Nonqualified Plans)

Briefly discuss the origins and trends in retirement plans in the US.(Defining Retirement Plans)

Defined contribution plans guarantee particular benefit amounts to participating employees.(Defined Contribution Plans)

A salary reduction agreement refers to the annual maximum allowable contribution to a participant's account in a defined contribution plan.(Defined Contribution Plans)

This type of hybrid plan is based on income and years of service,uses individual accounts,passes the IRS's cross-testing rules and the total benefits are based on the investment performance of the plan's assets.(Target Benefit Plans)

The Revenue Act of 1921 instituted retirement plans as a mandatory bargaining subject between unions and management.(Origins of Employer-Sponsored Retirement Benefits)

Top-heavy provisions ensure minimum benefits for key employees.(Qualified vs.Nonqualified Plans)

Discuss the controversies related with cash balance retirement plans.(Concerns about Cash Balance Plans)

There are three possible contribution sources for defined contribution plans.Which of the following is not one of those sources? (Defined Contribution Plans)

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

Which of the following is a tax benefit associated with 401(k)plans? (401(k)Plans)

Service industries such as retail and food service are not capital intensive,and most have the reputation of paying low wages and offering less generous benefits,including retirement plans.(Trends in Retirement Plan Coverage and Costs)

Savings Incentive Match Plans for Employees (SIMPLEs)can be either leveraged or nonleveraged.(Savings Incentive Match Plans for Employees (SIMPLEs))

This type of hybrid plan defines benefits for each employee by reference to the amount of the employee's hypothetical account balance.(Cash Balance Plans and Pension Equity Plans)

The Pension Benefit Guarantee Corporation recognizes three types of plan terminations: distress terminations,involuntary terminations,and standard terminations.(Defined Contribution Plans)

Capital-intensive businesses require highly capable employees who have the aptitude to learn how to use complex physical equipments such as casting machines and robotics.(Trends in Retirement Plan Coverage and Costs)

Retirement benefits are generally distributed in one of these three ways.(Qualified vs.Nonqualified Plans)

Introducing Employee Benefits

The Psychology and Economics of Employee Benefits

Regulating Employee Benefits

Employer-Sponsored Health-Care Plans

Employer-Sponsored Disability Insurance, life Insurance, and Workers Compensation

Government-Mandated Social Security Programs

Paid Time-Off and Flexible Work Schedule Benefits

Accommodation and Enhancement Benefits

Managing the Employee-Benefits System

Nonqualified Deferred Compensation Plans for Executives

Global Employee Benefits at a Glance

Filters