Retirement - 46: Qualified & Nonqualified Plans Compared Flashcards Preview

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Flashcards in Retirement - 46: Qualified & Nonqualified Plans Compared Deck (18)
0

Discrimination prohibited

Qualified plan

1

Discrimination allowed

Nonqualified plan

2

ERISA rules generally apply

Qualified plan

3

ERISA rules generally do not apply

Nonqualified plan

4

Limits on benefits apply, and compensation that can be considered is limited to $260,000 in 2014

Qualified plan

5

No limits on benefits or on compensation apply

Nonqualified plan

6

Coverage, participation, vesting rules apply

Qualified plan

7

Coverage, participation, and vesting rules do not apply

Nonqualified plan

8

Employer contributions are deductible in the current year

Qualified plan

9

Employer takes a deduction in the year the employee receives income

Nonqualified plan

10

Earnings on assets are income-tax-deferred

Qualified plan

11

Earnings on assets are taxable to the employer

Nonqualified plan

12

Employee has no income until distributions are made

Qualified plan

13

Employee has income unless the plan is unfunded or the employee has a substantial risk of forfeiture

Nonqualified plan

14

Benefits are protected from creditors of the employer or employee

Qualified plan

15

Benefits are subject to the employer's creditors, and when nonforfeitable, benefits are subject to the employee's creditors

Nonqualified plan

16

Rollover to an IRA or qualified plan is available

Qualified plan

17

No rollover is available, so benefits are not portable

Nonqualified plan