Question 1

Safe harbors refer to compliance guidelines in a law or regulation.(Qualified vs.Nonqualified Plans)

Accepted Answer

A) True 
 B)False

Question 2

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 
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 3

Under a defined benefit plan,the benefit is fixed by a formula and employer contributions remain the same from year to year.(Defined Benefit Plans)

Accepted Answer

A) True 
 B)False

Question 4

A top-heavy plan must also provide a special vesting schedule: 3-year 100% vesting schedule,or 6-year graded vesting schedule.(Qualified vs.Nonqualified Plans)

Accepted Answer

A) True 
 B)False

Question 5

Employees can participate in pension plans after they have reached the age of 25 (Qualified vs.Nonqualified Plans)

Accepted Answer

A) True 
 B)False

Question 6

The average benefit test is a method for determining participation requirements.(Qualified vs.Nonqualified Plans)

Accepted Answer

A) True 
 B)False

Question 7

Companies establish qualified plans for executive employees.(Qualified vs.Nonqualified 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

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

Accepted Answer

A) True 
 B)False

Question 10

The 1331/3 % rule refers to what? (Defined Benefit Plans)

Accepted Answer

A) The annual accrual rate for defined benefits plans 
B) The annual accrual rate for defined contribution plans 
C) The annual accrual rate for qualified benefit plans 
D) The annual accrual rate for qualified contribution plans 
A) The annual accrual rate for defined benefits plans 
B) The annual accrual rate for defined contribution plans 
C) The annual accrual rate for qualified benefit plans 
D) The annual accrual rate for qualified contribution plans

Question 11

Wearaway occurs whenever benefits accrue at a substantially higher rate during the years close to an employee's eligibility to earn retirement benefits.(Cash Balance Plans and Pension Equity Plans)

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

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

Question 13

Forfeitures come from the accounts of employees who terminate their employment prior to earning vesting rights.(Defined Contribution Plans)

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not an accrual criteria? (Defined Benefit Plans)

Accepted Answer

A) Average benefit test 
B) 3% rule 
C) Fractional rule 
D) 113 1/3 rule 
A) Average benefit test 
B) 3% rule 
C) Fractional rule 
D) 113 1/3 rule

Question 15

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

Question 16

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 17

The benefits distributed from profit sharing plans are usually allocated using one of these three ways.(Profit Sharing Plans)

Accepted Answer

A) Lump sum payments,graduated payments,proportional payments based on their contributions to profits 
B) Equal payments,proportional payments based on salary,lump sum payments,graduated payments 
C) Equal payments,proportional payments based on salary,proportional payments based on their contributions to profits 
D) Equal payments based on contributions to profits,equal payments based on salary,lump sum payments 
A) Lump sum payments,graduated payments,proportional payments based on their contributions to profits 
B) Equal payments,proportional payments based on salary,lump sum payments,graduated payments 
C) Equal payments,proportional payments based on salary,proportional payments based on their contributions to profits 
D) Equal payments based on contributions to profits,equal payments based on salary,lump sum payments

Question 18

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 
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 19

Define vesting and explain what employees are vesting in when in a defined benefit plans or in a defined contribution plans.Briefly explain the difference between cliff vesting and the six-year graduated vesting schedule.(Qualified vs.Nonqualified Plans)

Accepted Answer

Main Points 
-Vesting refers to an emplo

Question 20

To qualify as a nondiscriminating defined contribution plan,it must meet which two safe harbors? (Defined Contribution Plans)

Accepted Answer

A) Base contribution formula or collateral contribution formula 
B) Fixed first-dollar-of-profits formula or graduated first-dollar-of-profits formula 
C) Uniform allocation formula or uniform points allocation formula 
D) Profitability threshold formula or the backloading formula 
A) Base contribution formula or collateral contribution formula 
B) Fixed first-dollar-of-profits formula or graduated first-dollar-of-profits formula 
C) Uniform allocation formula or uniform points allocation formula 
D) Profitability threshold formula or the backloading formula

Safe harbors refer to compliance guidelines in a law or regulation.(Qualified vs.Nonqualified Plans)

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

Under a defined benefit plan,the benefit is fixed by a formula and employer contributions remain the same from year to year.(Defined Benefit Plans)

A top-heavy plan must also provide a special vesting schedule: 3-year 100% vesting schedule,or 6-year graded vesting schedule.(Qualified vs.Nonqualified Plans)

Employees can participate in pension plans after they have reached the age of 25 (Qualified vs.Nonqualified Plans)

The average benefit test is a method for determining participation requirements.(Qualified vs.Nonqualified Plans)

Companies establish qualified plans for executive employees.(Qualified vs.Nonqualified Plans)

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

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

The 133^1/3% rule refers to what? (Defined Benefit Plans)

Wearaway occurs whenever benefits accrue at a substantially higher rate during the years close to an employee's eligibility to earn retirement benefits.(Cash Balance Plans and Pension Equity Plans)

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

Forfeitures come from the accounts of employees who terminate their employment prior to earning vesting rights.(Defined Contribution Plans)

Which of the following is not an accrual criteria? (Defined Benefit Plans)

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

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

The benefits distributed from profit sharing plans are usually allocated using one of these three ways.(Profit Sharing Plans)

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

Define vesting and explain what employees are vesting in when in a defined benefit plans or in a defined contribution plans.Briefly explain the difference between cliff vesting and the six-year graduated vesting schedule.(Qualified vs.Nonqualified Plans)

To qualify as a nondiscriminating defined contribution plan,it must meet which two safe harbors? (Defined Contribution 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

Safe harbors refer to compliance guidelines in a law or regulation.(Qualified vs.Nonqualified Plans)

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

Under a defined benefit plan,the benefit is fixed by a formula and employer contributions remain the same from year to year.(Defined Benefit Plans)

A top-heavy plan must also provide a special vesting schedule: 3-year 100% vesting schedule,or 6-year graded vesting schedule.(Qualified vs.Nonqualified Plans)

Employees can participate in pension plans after they have reached the age of 25 (Qualified vs.Nonqualified Plans)

The average benefit test is a method for determining participation requirements.(Qualified vs.Nonqualified Plans)

Companies establish qualified plans for executive employees.(Qualified vs.Nonqualified Plans)

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

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

The 1331/3 % rule refers to what? (Defined Benefit Plans)

Wearaway occurs whenever benefits accrue at a substantially higher rate during the years close to an employee's eligibility to earn retirement benefits.(Cash Balance Plans and Pension Equity Plans)

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

Forfeitures come from the accounts of employees who terminate their employment prior to earning vesting rights.(Defined Contribution Plans)

Which of the following is not an accrual criteria? (Defined Benefit Plans)

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

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

The benefits distributed from profit sharing plans are usually allocated using one of these three ways.(Profit Sharing Plans)

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

Define vesting and explain what employees are vesting in when in a defined benefit plans or in a defined contribution plans.Briefly explain the difference between cliff vesting and the six-year graduated vesting schedule.(Qualified vs.Nonqualified Plans)

To qualify as a nondiscriminating defined contribution plan,it must meet which two safe harbors? (Defined Contribution 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

The 133^1/3% rule refers to what? (Defined Benefit Plans)