Question 1

Under a unit-benefit formula,benefits are a function of both

Accepted Answer

A) earnings and years of service. 
B) age and earnings. 
C) age and gender. 
D) years of service and position within a firm. 
A) earnings and years of service. 
B) age and earnings. 
C) age and gender. 
D) years of service and position within a firm.

Question 2

Which of the following statements concerning vesting under qualified retirement plans is (are)true?
I.The same vesting rules apply to defined benefit plans and defined contribution plans.
II.Employer contributions to a defined contribution plan must vest faster than employer contributions to a defined benefit plan.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 3

Which of the following statements about Section 401(k)plans is true?

Accepted Answer

A) Elective salary deferrals to these plans are free of federal income taxation until the funds are actually withdrawn. 
B) These plans are exempt from rules that prevent discrimination in favor of highly compensated employees. 
C) There is no limit on the actual percentage of salary that can be deferred by highly compensated employees under a qualified plan. 
D) If an employee takes the funds made available to him or her in cash,the money received is not taxable. 
A) Elective salary deferrals to these plans are free of federal income taxation until the funds are actually withdrawn. 
B) These plans are exempt from rules that prevent discrimination in favor of highly compensated employees. 
C) There is no limit on the actual percentage of salary that can be deferred by highly compensated employees under a qualified plan. 
D) If an employee takes the funds made available to him or her in cash,the money received is not taxable.

Question 4

Winslow Corporation has many long-term employees.The company has never had a pension plan.Recently,a new management team was hired.The new president said he would like to start a pension plan through which he could reward the long-term service provided by many employees.Which of the following types of plans should Winslow Corporation adopt?

Accepted Answer

A) section 403(b)plan 
B) section 401(k)plan 
C) defined contribution plan 
D) defined benefit plan 
A) section 403(b)plan 
B) section 401(k)plan 
C) defined contribution plan 
D) defined benefit plan

Question 5

Beta Corporation has 1,000 employees eligible to participate in the firm's pension plan,and 100 of these employees are considered highly compensated.All of the highly compensated employees are covered by the plan.What is the minimum number of the 900 non-highly compensated employees who must be covered by the plan in order for the plan to satisfy the ratio percentage test?

Accepted Answer

A) 500 
B) 630 
C) 667 
D) 900 
A) 500 
B) 630 
C) 667 
D) 900

Question 6

For a long-term employee who is covered by a defined benefit plan,the highest retirement income will be obtained if his/her retirement income is based on

Accepted Answer

A) initial average pay. 
B) random year annual pay. 
C) career-average pay. 
D) final average pay. 
A) initial average pay. 
B) random year annual pay. 
C) career-average pay. 
D) final average pay.

Question 7

Which of the following statements about the tax implications of qualified pension plans is true?

Accepted Answer

A) Investment income on plan assets is taxable in the year the investment income is earned. 
B) Employer contributions are deductible up to certain limits as an ordinary business expense. 
C) Employer contributions are considered taxable income to employees but are taxed at capital gains rates. 
D) Distributions from qualified pension plans are received tax-free by the retiree. 
A) Investment income on plan assets is taxable in the year the investment income is earned. 
B) Employer contributions are deductible up to certain limits as an ordinary business expense. 
C) Employer contributions are considered taxable income to employees but are taxed at capital gains rates. 
D) Distributions from qualified pension plans are received tax-free by the retiree.

Question 8

Which of the following statements about retirement ages in defined benefit pension plans is (are)true?
I.The normal retirement age in most plans is 65.
II.For a defined benefit plan,the early retirement age is the earliest age an employee can retire with full,unreduced benefits.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 9

Which of the following statements about tax-deferred retirement plans in the U.S.is true?
I.Women,on average,receive lower employment-based retirement income than men.
II.One way to hedge against inflation is to invest lump-sum pension distributions in fixed-income investments.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 10

Which of the following statements about SIMPLE retirement plans is true?

Accepted Answer

A) They are limited to employers with 100 or fewer eligible employees and who do not maintain another qualified plan. 
B) Employees are not permitted to make SIMPLE plan contributions. 
C) Employers are subject to more stringent nondiscrimination rules than those that apply to most qualified plans. 
D) Employer contributions are fully taxable in the year of the contribution,but qualified distributions are received tax-free. 
A) They are limited to employers with 100 or fewer eligible employees and who do not maintain another qualified plan. 
B) Employees are not permitted to make SIMPLE plan contributions. 
C) Employers are subject to more stringent nondiscrimination rules than those that apply to most qualified plans. 
D) Employer contributions are fully taxable in the year of the contribution,but qualified distributions are received tax-free.

Under a unit-benefit formula,benefits are a function of both

Which of the following statements about Section 401(k)plans is true?

For a long-term employee who is covered by a defined benefit plan,the highest retirement income will be obtained if his/her retirement income is based on

Which of the following statements about the tax implications of qualified pension plans is true?

Which of the following statements about retirement ages in defined benefit pension plans is (are)true? I.The normal retirement age in most plans is 65. II.For a defined benefit plan,the early retirement age is the earliest age an employee can retire with full,unreduced benefits.

Which of the following statements about tax-deferred retirement plans in the U.S.is true? I.Women,on average,receive lower employment-based retirement income than men. II.One way to hedge against inflation is to invest lump-sum pension distributions in fixed-income investments.

Which of the following statements about SIMPLE retirement plans is true?

Risk and Its Treatment

Insurance and Risk

Introduction to Risk Management

Enterprise Risk Management

Types of Insurers and Marketing Systems

Insurance Company Operations

Financial Operations of Insurers

Government Regulation of Insurance

Fundamental Legal Principles

Analysis of Insurance Contracts

Life Insurance

Life Insurance and Contractual Provisions

Buying Life Insurance

Annuities and Individual Retirement Accounts

Health-Care Reform;individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Social Insurance

The Liability Risk

Auto Insurance

Auto Insurance Continued

Homeowners Insurance,section I

Homeowners Insurance,section II

Other Property and Liability Insurance Coverages

Commercial Property Insurance

Commercial Liability Insurance

Crime Insurance and Surety Bonds

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Exam 17: Employee Benefits: Retirement Plans

Under a unit-benefit formula,benefits are a function of both

Which of the following statements about Section 401(k)plans is true?

For a long-term employee who is covered by a defined benefit plan,the highest retirement income will be obtained if his/her retirement income is based on

Which of the following statements about the tax implications of qualified pension plans is true?

Which of the following statements about retirement ages in defined benefit pension plans is (are)true? I.The normal retirement age in most plans is 65. II.For a defined benefit plan,the early retirement age is the earliest age an employee can retire with full,unreduced benefits.

Which of the following statements about tax-deferred retirement plans in the U.S.is true? I.Women,on average,receive lower employment-based retirement income than men. II.One way to hedge against inflation is to invest lump-sum pension distributions in fixed-income investments.

Which of the following statements about SIMPLE retirement plans is true?

Risk and Its Treatment

Insurance and Risk

Introduction to Risk Management

Enterprise Risk Management

Types of Insurers and Marketing Systems

Insurance Company Operations

Financial Operations of Insurers

Government Regulation of Insurance

Fundamental Legal Principles

Analysis of Insurance Contracts

Life Insurance

Life Insurance and Contractual Provisions

Buying Life Insurance

Annuities and Individual Retirement Accounts

Health-Care Reform;individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Social Insurance

The Liability Risk

Auto Insurance

Auto Insurance Continued

Homeowners Insurance,section I

Homeowners Insurance,section II

Other Property and Liability Insurance Coverages

Commercial Property Insurance

Commercial Liability Insurance

Crime Insurance and Surety Bonds

Filters