Ch. 7 Qualified Plan Rules Flashcards Preview

Employee Benefit Final > Ch. 7 Qualified Plan Rules > Flashcards

Flashcards in Ch. 7 Qualified Plan Rules Deck (22):
1

t/f: The ratio benefit test states that a qualified plan must cover a percentage of nonhighly compensated employees that is at least 70% of the percentage of highly compensated employees covered.

true

2

t/f: A top-heavy plan is one that provides more than 60% of its aggregate accrued benefits or account balances to key employees.

true

3

t/f: When applying coverage tests to evaluate the presence of discrimination in qualified plan offerings, an employer must include all employees, even those who have a collective bargaining agreement on retirement benefits.

false

4

A qualified plan must satisfy what 2 tests?

Ratio percentage test
participation test

5

For a defined contribution plan, annual additions include what?

employer contributions
employee salary reductions
plan forfeitures

6

Employee contribution must always be ____ vested

100%

7

Employer contribution must be vested under a ....

specified vesting schedule

8

Participation test must cover the lesser of

50 employees
OR
the greater of 40% or more of all employees or two employees, or if only one, that employee

9

Waiting period requirements

two year waiting period if plan provides immediate 100% vesting for all employees

10

Age and service

must be vested after on year of service (1,000 hours) or age 21, whichever is later

11

Defined benefit plan vesting

5 year or 3-7 yr vesting

12

Defined contribution plan

3 yr or 2-6yr vesting

13

Contributions must be made to an ____ or ____

irrevocable trust or insurance contract

14

What happens if it doesnt meet the minimum funding standards

subject to penalty

15

Profit-sharing plan contribution must meet what requirements

"substantial and recurring"

16

Defined benefit plan deductions are limited to the greater of what?

an amount actuarially determined under IRC section 401
OR
the amount required to meet minimum funding

17

Combined benefit and defined plan deductions are limited to the greater of what?

25% of compensation of all participants
OR
the amount required to meet minimum funding

18

Annual additions to each account cannot exceed the lessor of...

100% of participants annual comp
OR
$49,000

19

Only the first _____ of each employee's annual compensation can be taken into account in a plan's benefit or contribution formula

$245,000

20

Top heavy plan must provide

100% vesting after 3yrs or 6 yr graded
OR
min benefits or contributions for non HCE

21

What is a key employee?

Officer having annual comp greater than $160,000
owns more than 5% of co
OR
owned more than 1% and had annual comp of more than $150,000

22

No more than ___ employees can be treated as officers

50