8/2 Quiz: Employer-sponsored Retirement – Flashcards

A SEP is available to small employers. Contributions made to employees are deductible up to 25%. The correct answer is: SEP

A SEP is available to small employers. Contributions made to employees are deductible up to 25%. The correct answer is: SEP

In a pension plan, employer contributions to a pension plan are based on the employee's compensation and years of service with the company, not the company's profitability or the employer's preference. Money-purchase and target benefit are types of pension plans. The correct answer is: All of the above

The maximum contribution to a 403(b) plan for individuals age 49 and below is $18,000 in 2015. The correct answer is: $18,000

A group deferred annuity is a defined benefit plan. The correct answer is: Group deferred annuity

In a pension plan, employer contributions to a pension plan are based on the employee's compensation and years of service with the company, not the company's profitability or the employer's preference. Money-purchase and target benefit are types of pension plans. The correct answer is: All of the above

Cash or deferred arrangement (CODA) plans include: 401(k), 403(b) and tax-sheltered annuities. A money-purchase pension plan is a type of defined contribution plan. The correct answer is: Money-purchase pension plan

A target benefit pension plan is a combination of a defined contribution plan and a defined benefit plan. Contributions are made as in money-purchase pension plans, but a target benefit amount is identified. This target benefit is a goal and is not always attained. The correct answer is: Target benefit pension plan

Individual annuities are used to fund defined benefit plans. The correct answer is: Individual annuity

Qualified retirement plans are grouped into two primary categories: defined benefit plans and defined contribution plans. The correct answer is: Defined benefit plans and defined contribution plans

Employee stock ownership plans (ESOPs) are employee benefit plans. ESOPs are similar to profit-sharing plans. Here's how an ESOP works: the employer establishes a trust fund, and uses cash or new shares of its stock to purchase existing shares. The correct answer is: ESOP

The maximum annual benefit for defined benefit plans for 2015 is the same as it was in 2014 - $210,000. The correct answer is: $210,000

Qualified retirement plans are grouped into two primary categories: defined benefit plans and defined contribution plans. The correct answer is: Defined benefit plans and defined contribution plans

401(k) plans are qualified retirement plans. The correct answer is: 401(k)

A group deferred annuity is a defined benefit plan. The correct answer is: Group deferred annuity.

Cash or Deferred Arrangement (CODA) plans are modified profit-sharing or pension plans. These are 401(k) and 403(b) plans. The correct answer is: 401(k)

Simplified Employee Pension (SEP) plans, or 408(k) plans, are qualified plans for small employers. SEPs are a mix of an IRA and a profit-sharing plan. The correct answer is: SEP

SIMPLE plans are designed for employers with 100 or fewer employees. The correct answer is: SIMPLE

Nonprofit organizations, such as churches and public schools, may provide a 403(b) plan to their employees. The correct answer is: Public school

401(k) plans are qualified retirement plans. The correct answer is: 401(k)

The maximum annual benefit for defined benefit plans is $210,000. The correct answer is: $210,000

Qualified retirement plans are grouped into two primary categories: defined benefit plans and defined contribution plans. The correct answer is: Defined benefit and defined contribution

The section 457 plan is a nonqualified deferred compensation plan for employees of the government and nonprofit organizations. The correct answer is: Section 457 plan

The maximum annual contribution under a defined contribution plan is $53,000 in 2015. The correct answer is: $53,000

Qualified retirement plans are grouped into two primary categories: defined benefit plans and defined contribution plans. The correct answer is: Defined benefit and defined contribution

Simplified Employee Pension (SEP) plans, or 408(k) plans, are qualified plans for small employers. SEPs are a mix of an IRA and a profit-sharing plan. The correct answer is: 408(k)

A target benefit pension plan is a combination of a defined contribution plan and a defined benefit plan. Contributions are made as in money-purchase pension plans, but a target benefit amount is identified. This target benefit is a goal and is not always attained. The correct answer is: Target benefit pension plan

403(b) plans are tax-sheltered annuities for nonprofit organizations. The correct answer is: 403(b)

Defined benefit plans must cover 50 eligible employees, or 40% of all employees, with at least two participants. The correct answer is: Defined benefit plans must cover 50 eligible employees, or 40% of all employees, with at least two participants.

A group deferred annuity is a defined benefit plan. The correct answer is: Group deferred annuity

Cash or Deferred Arrangement (CODA) plans are modified profit-sharing or pension plans (401(k) and 403(b) are CODA plans). These plans are termed CODA because part of the participant's compensation is deferred by putting it into the plan. There are two ways to defer compensation: 1.) a cash bonus is put into the participant's account on a pre-tax basis, or 2.) the participant takes a reduced salary, and the amount of the reduction is put into the plan on a pre-tax basis. The correct answer is: All of the above

Deferred annuities are used to fund defined benefit plans. The correct answer is: Deferred annuity

Individual annuities are used to fund defined benefit plans. The correct answer is: Individual annuity

A group deferred annuity is a defined benefit plan. The correct answer is: Group deferred annuity

Qualified retirement plans are grouped into two primary categories: defined benefit plans and defined contribution plans. The correct answer is: Defined benefit plans and defined contribution plans

A SEP is available to small employers. Contributions made to employees are deductible up to 25%. The correct answer is: SEP

The two primary types of qualified plans are defined benefit and defined contribution plans. The correct answer is: Defined benefit plans and defined contribution plans

The most common funding tool used for defined benefit plans is an individual or group deferred annuity. The correct answer is: Both of the above

In a profit-sharing plan, company profits are distributed to plan participants. The correct answer is: Profit-sharing plan

401(k) plans are qualified retirement plans. The correct answer is: 401(k)

Nonprofit organizations, such as public schools and churches, may provide a 403(b) plan to their employees. The correct answer is: A church

In a money-purchase pension plan, the employer contributes a fixed amount to the plan every year, and this amount is apportioned among each participant's account. Upon retirement, participants' benefit amounts are based on the funds in their accounts. The correct answer is: Money-purchase pension plan

A 401(k) plan is a qualified retirement plan. Personal annuities, deferred compensation and split-dollar plans are nonqualified. The correct answer is: 401(k)

The maximum contribution to a 403(b) plan for individuals age 49 and below is $18,000 in 2015. The correct answer is: $18,000

403(b) plans are tax-sheltered annuities for nonprofit organizations. The correct answer is: 403(b)