Finance

Which of the following statements is (are) true with respect to vestin

Which of the following statements is (are) true with respect to vesting under a qualified retirement plan? I. Vesting helps to reduce labor turnover. II. An employee who terminates employment after four years of service has no vested retirement benefit under cliff vesting. A) I only B) II only C) both I and II D) […]

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Date: September 19th, 2020

Rita went to work for a manufacturing company. The company offers a de

Rita went to work for a manufacturing company. The company offers a defined-benefit pension plan. The retirement benefit is equal to 1.5 percent multiplied by years of service with the company, and the result is multiplied by average salary in the three highest consecutive years of paid employment with the company. The benefit formula used […]

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Date: September 19th, 2020

Which of the following statements is (are) true with respect to SIMPLE

Which of the following statements is (are) true with respect to SIMPLE retirement plans? I. Only large employers can start a SIMPLE plan, provided the employer does not maintain another qualified plan. II. SIMPLE plans are exempt from most nondiscrimination and administrative rules that apply to qualified plans. A) I only B) II only C) […]

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Date: September 19th, 2020

RST Company offers a qualified retirement plan. Each employee contribu

RST Company offers a qualified retirement plan. Each employee contributes 4 percent of his or her pretax income to the plan, and RST matches the employee’s contribution. An employee’s benefit at retirement is determined by his or her account balance at the time of retirement. What type of retirement plan does RST offer? A) defined […]

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Date: September 19th, 2020

ABC Company offers a qualified retirement plan. ABC selected a funding

ABC Company offers a qualified retirement plan. ABC selected a funding instrument with an insurer in which the insurer promised to pay a specified interest rate for a number of years on a lump sum deposit. This funding instrument is called a A) trust-fund plan. B) group deferred annuity. C) separate investment account. D) guaranteed […]

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Date: September 19th, 2020

Which of the following statements about the minimum vesting standards

Which of the following statements about the minimum vesting standards for a qualified defined benefit plan is (are) true? I. Under cliff vesting, an employee must be at least 50 percent vested after 5 years of service. II. Under graded vesting, an employee must be at least 20 percent vested after 3 years of service […]

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Date: September 19th, 2020

Early distributions from qualified retirement plans are assessed a 10

Early distributions from qualified retirement plans are assessed a 10 percent penalty. However, there are some exceptions to this rule. All of the following distributions are exempt from the penalty tax EXCEPT A) lump-sum distributions made after age 59.5. B) lump-sum distributions made directly to the employee at any age when he or she changes […]

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Date: September 19th, 2020

Which of the following statements is true with regard to defined benef

Which of the following statements is true with regard to defined benefit and defined contribution pension plans? A) It’s easier for an employer to determine its annual pension contribution under a defined benefit plan than under a defined contribution plan. B) When a new pension plan is installed, it’s more beneficial for older workers if […]

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Date: September 19th, 2020

As Social Security slants benefits in favor of lower-paid workers, the

As Social Security slants benefits in favor of lower-paid workers, the Internal Revenue Code permits employers to adjust pension contributions so that the overall contributions (pension plus Social Security) are nondiscriminatory. This adjustment permits employers to increase pension contributions for highly-compensated employees. Adjusting contributions to consider Social Security contributions is called A) prorating. B) indexing. […]

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Date: September 19th, 2020