Assignment 3 - DC Plans Review Questions 1. Which one of...

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DC Plans Review Questions 1. Which one of the following is true about employer contributions into a money purchase plan? a. contributions cannot exceed 30% of an employee’s compensation b. in 2005, the maximum dollar amount of annual contributions to an employee’s account cannot exceed $50,000 c. plan contributions go into a pooled account rather than into individual employee accounts d. plan benefits accumulate in individual employee accounts which will be available at retirement or termination of employment 2. Which one of the following may be considered a disadvantage for employees to money purchase pension plans? a. employees bear investment risk under the plan b. employers bear investment risk under the plan c. plan distributions may be eligible for the 10-year special averaging computation d. good investment results increase plan benefits 3. Which one of the following correctly identifies the term used to identify a plan benefit formula that can be integrated with Social Security? a. offset formula b. social insurance rider c. permitted disparity d. compensation analysis formula 4. Which of the following are true regarding money purchase plans? (1) self-employed persons can adopt a money purchase plan (2) plans in S corporations cannot cover shareholder-employees (3) money purchase plans can allow after-tax employee contributions (4) salary reductions allowing pre-tax contributions are not allowed for post-1974 plans a. (1) and (3) only b. (1) (3) and (4) only c. (2) (3) and (4) only d. (1) (2) (3) and (4) 5. Which one of the following provides the greatest amount of flexibility for employer profit sharing plan contributions?
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a. a discretionary provision b. a formula provision c. a money purchase paired plan provision d. a target benefit provision 6. After the minimum two-year holding requirement, what amounts may be withdrawn from a participant’s profit sharing plan account prior to retirement or termination? a. 100% of account assets b. no more than 25% of the account’s current value c. an amount not to exceed the participant’s vested account balance e. an amount not to exceed the entire account balance, as long as hardship requirements have been met 7. Assuming a plan remains qualified, on which of the following amounts are income taxation deferred? (1) employer contributions
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This note was uploaded on 02/24/2010 for the course ACCOUNTING 578844 taught by Professor Mctosh during the Spring '10 term at UCLA.

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Assignment 3 - DC Plans Review Questions 1. Which one of...

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