CHAPTER 19--DEFERRED COMPEN

Which of the following characteristics describes a

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46. Which of the following characteristics describes a defined benefit plan? A. Subject to PBGC plan termination insurance rules. B. An account for each participant is not established. C. Defines the amount the employer is required to contribute. D. Only a. and b. E. a., b., and c. 47. Color, Inc., has a profit sharing plan with some participants earning $245,000 or more. They can maximize these participants’ annual additions by using what percentage profit sharing contribution? 48. Paul is a participant in a qualified retirement plan in 2010. In which situation would he be considered highly compensated? 49. Zeb has four years of service completed as of February 5, 2010, his employment anniversary date. If his defined benefit plan uses the graded vesting rule, determine Zeb’s nonforfeitable percentage. 50. Jane has five years of service completed as of February 5, 2010, her employment anniversary date. If the defined benefit plan uses the cliff vesting schedule, determine Jane’s nonforfeitable percentage. A. 0%. B. 60%. C. 80%. D. 100%. E. None of the above. 51. Brown, Inc., uses the two-to-six-year graded vesting approach for its retirement plan. Joey has five years of service completed as of March 10, 2010, his employment anniversary date. Determine Joey’s nonforfeitable percentage. 5
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52. Mary, who is retired, reaches age 70 1/2 in 2010, and she will also be age 71 in 2010. She has a $170,000 balance in her traditional IRA. If her life expectancy is 15.3 years, what distribution, if any, must be made by April 1, 2011? 53. Jackie, age 52, is the sole remaining participant of a money purchase pension plan. The plan is terminated and a $200,000 taxable distribution is made to Jackie. The early distribution penalty tax, if any, for 2010 is: 54. Philip, age 68, has accumulated $829,000 in a defined contribution plan, $107,000 of which represents his own contributions. If the entire amount is distributed in 2010, his excise tax on the distribution is: A. $0. B. $10,300. C. $61,800. D. $72,200. E. None of the above.
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  • Spring '12
  • honig
  • a. b. c., b. c. d., C. D. E.

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