Question 1

In 2017,the IRC set the maximum annual benefits of defined benefits plans at what amount? (Defined Benefit Plans)

Accepted Answer

A) $135,000 
B) $215,000 
C) $235,000 
D) $250,000

Question 2

_____ provides non-key employees with a minimum benefit if it is a defined benefit plan or a minimum contribution if it is a defined contribution plan.(Qualified vs.Nonqualified Plans)

Accepted Answer

A) The fractional rule 
B) An accumulated benefit obligation 
C) A top-heavy plan 
D) A fiduciary

Question 3

The major distinction between the unit and flat defined benefit formulas is the use of the employee's years of service.( Benefit Formulas)

Accepted Answer

A) True 
 B)False

Question 4

Cliff vesting schedules must grant employees 100 percent vesting after no more than three years from beginning participation in the retirement plan.(Qualified vs.Nonqualified Plans)

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Nearly 55% of workers employed in the private sector participated in some form of retirement plan in 2016.(Trends in Retirement Plan Coverage and Costs)

Accepted Answer

A) True 
 B)False

Question 8

The Internal Revenue Code and ERISA's Title I and Title II provisions set 13 minimum standards to determine whether retirement plans are qualified or nonqualified.(Qualified vs.Nonqualified Plans)

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

In defined contribution plans,employees vest in gross employer contributions.(Qualified vs.Nonqualified Plans)

Accepted Answer

A) True 
 B)False

Question 11

The Tenth Circuit Court ruled in Tomlinson et al.vs.El Paso Corporation that ERISA did not require the employer to provide notification of wearaway periods so long as employees were informed and forewarned of plan changes.(Cash Balance Plans and Pension Equity Plans)

Accepted Answer

A) True 
 B)False

Question 12

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

Question 13

Which of the following is not a hybrid plan? (Hybrid Plans)

Accepted Answer

A) Money purchase 
B) Cash balance 
C) Stock option 
D) Target benefit

Question 14

Which of the following factors does not determine the accrual rate in defined contribution plans? (Defined Contribution Plans)

Accepted Answer

A) Benefits equal balance in the account 
B) Company cannot set maximum age limits for discontinuing contributions 
C) Company's contribution cannot be reduced because of employee age 
D) Benefits exceed the balance in the account

Question 15

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

Accepted Answer

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

Question 16

Unions generally secured high wages for their members through the earl 1960s,when competition from foreign companies offered quality products at similar or lower prices.(Trends in Retirement Plan Coverage and Costs)

Accepted Answer

A) True 
 B)False

Question 17

A qualified preretirement survivor annuity (QPSA)is an annuity for the life of the participant,with a survivor annuity for the participant's spouse.(Qualified vs.Nonqualified Plans)

Accepted Answer

A) True 
 B)False

Question 18

Section 457 Plans are nonqualified retirement plans for government employees.(457 Plans)

Accepted Answer

A) True 
 B)False

Question 19

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 20

Only one event triggers a mandatory distribution: the participant reaches age 65 or the normal retirement age.(Qualified vs.Nonqualified Plans)

Accepted Answer

A) True 
 B)False

Exam 4: Employer-Sponsored Retirement Plans

In 2017,the IRC set the maximum annual benefits of defined benefits plans at what amount? (Defined Benefit Plans)

_____ provides non-key employees with a minimum benefit if it is a defined benefit plan or a minimum contribution if it is a defined contribution plan.(Qualified vs.Nonqualified Plans)

The major distinction between the unit and flat defined benefit formulas is the use of the employee's years of service.( Benefit Formulas)

Cliff vesting schedules must grant employees 100 percent vesting after no more than three years from beginning participation in the retirement plan.(Qualified vs.Nonqualified Plans)

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

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

Nearly 55% of workers employed in the private sector participated in some form of retirement plan in 2016.(Trends in Retirement Plan Coverage and Costs)

The Internal Revenue Code and ERISA's Title I and Title II provisions set 13 minimum standards to determine whether retirement plans are qualified or nonqualified.(Qualified vs.Nonqualified Plans)

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

In defined contribution plans,employees vest in gross employer contributions.(Qualified vs.Nonqualified Plans)

The Tenth Circuit Court ruled in Tomlinson et al.vs.El Paso Corporation that ERISA did not require the employer to provide notification of wearaway periods so long as employees were informed and forewarned of plan changes.(Cash Balance Plans and Pension Equity Plans)

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

Which of the following is not a hybrid plan? (Hybrid Plans)

Which of the following factors does not determine the accrual rate in defined contribution plans? (Defined Contribution Plans)

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

Unions generally secured high wages for their members through the earl 1960s,when competition from foreign companies offered quality products at similar or lower prices.(Trends in Retirement Plan Coverage and Costs)

A qualified preretirement survivor annuity (QPSA)is an annuity for the life of the participant,with a survivor annuity for the participant's spouse.(Qualified vs.Nonqualified Plans)

Section 457 Plans are nonqualified retirement plans for government employees.(457 Plans)

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

Only one event triggers a mandatory distribution: the participant reaches age 65 or the normal retirement age.(Qualified vs.Nonqualified Plans)