Standardized plans reduce costs of qualified plans by

Using standardized language to adhere to IRS requirements

A qualified pre-retirement survivor annuity is

A payment to the surviving spouse when the participant dies before retiring

A qualified plan must address

Highly Compensated Employees, Age and Service participation Requirements, Overall Benefit Coverage

The ratio benefit test means that

Cover at least 70% of Non - Highly Compensated Employees

In order to prepare to adopt a qualified plan an employer should

Document and prepare for plan adoption one year in advance of adoption.

A three year cliff vesting schedule means

The employee is 100% vested in all contributions after 3 years

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RMI 330 Establishing Qualified Plans Round 1

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Questions 11

Answers

1
Qualified plans may offer distributions in the form of
A partial distribution subject to penalty and tax.
All of the above.
Loans based on the available fund balance
Lump sum in total
2
Standardized plans reduce costs of qualified plans by
Expanding options for a customized plan
Using standardized language to adhere to IRS requirements
None of the above
Adopting highly customized qualified plans individiually
3
The formula for the nontaxable amount is distribution x Cost Basis divided by total plan value.
False
True
4
A qualified pre-retirement survivor annuity is
An pre retirement annuity to give the spouse benefits after retiring.
A payment to the surviving spouse when the participant dies after retiring.
An annuity set up that gives the spouse to retirement
A payment to the surviving spouse when the participant dies before retiring
5
A qualified plan must address
Highly Compensated Employees
Age and Service participation Requirements
None of the above
Overall Benefit Coverage
6
The ratio benefit test means that
At least 70% of Highly compensated employees are covered
Cover at least 70% of Non - Highly Compensated Employees
Must cover at least 85% of Highly Compensated Employees
Must cover at least 85% of non-highly compensated employees
7
An Advance Determination Letter
Helps employers seek an early opinion for a qualified plan
Is not required for a qualified plan
A problem cannot be fixed without an advanced determination letter
All of the above
8
Highly Compensated Employees
Are in the top 20% of compensated employees
All of the above
Earn in excess of $130,000
Own 5% of the company
9
In order to prepare to adopt a qualified plan an employer should
Document and prepare for plan adoption one year in advance of adoption.
Complete planning and documentation in the year the plan is effective
Document the plan in the year after implementation and backdate documents.
None of the above
10
Which of the following are reason(s) that backdating is not allowed
Cannot deduct expenses that have not been accrued
A plan must be legally adopted by tax year end to be tax deductibel.
All events test (Events must occur by the end of the tax year).
All of the above
11
A three year cliff vesting schedule means
The employee is 100% vested in their contributions only.
The vesting percentage gradually increases every three years.
The employee is 100% vested in all contributions after 3 years
The employee is vested immediately when hired.

RMI 330 Establishing Qualified Plans Round 1 Flashcards | StudBud