Which of the following statements about the tax implications of qualified pension plans is true? 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 […]
Under many cafeteria plans, employees make premium contributions with pre-tax dollars and a salary reduction that are used to purchase group health insurance or dental insurance. This type of cafeteria plan is called a A) health reimbursement arrangement plan. B) premium conversion plan. C) full-choice plan. D) flexible spending account plan. ANSWER Answer: […]
Which of the following statements regarding recent developments in employer-sponsored health plans is (are) true? I. Preferred provider organizations (PPOs) continue to dominate group health insurance markets. II. The number of employers offering medical benefits to workers who retire early has increased. A) I only B) II only C) both I and II D) neither […]
An employer-funded plan with favorable tax advantages, which repays employees for medical care not covered by the employer’s standard medical plan is a(n) A) 401(k) account. B) individual retirement account (IRA). C) health reimbursement arrangement (HRA). D) flexible spending account (FSA). ANSWER Answer: C
What are the minimum age and service requirements that can be imposed on employees eligible to participate in a retirement plan? A) age 18 and 6 months of service B) age 21 and 1 year of service C) age 21 and 3 years of service D) age 25 and 4 years of service […]
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. A) I only B) II only C) […]
Which of the following statements concerning defined-benefit pension plans is (are) true? I. The contribution rate by the employer varies from year to year. II. The retirement benefit is not known in advance. A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: A
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 […]
Which of the following statements concerning defined contribution pension plans is (are) true? I. The contribution rate is fixed. II. The retirement benefit varies. A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: C
Which of the following is a characteristic of a health maintenance organization (HMO)? A) unlimited choice of health-care providers B) no premiums until care is provided C) narrow, limited, medical services provided D) emphasis on cost containment ANSWER Answer: D
