CH 2 - The Retirement Field

Question 1

Titles of ERISA

Title I - _________

Title II - _________

Title III - _________

Title IV - _________

Answer 1

Title I - the employee’s right sue an employer to collect promised benefits (LABOR)

Title II - Amends the Internal Revenue Code to condition tax benefits on meeting minimum standards (RULES)

Title III - divided responsibilities between the DOL and the IRS

Title IV - Establishes the Pension Benefit Guarantee Corporation

Question 2

What is the role of the IRS in the regulation of tax-advantaged retirement plans? (3)

Answer 2

1. issues voluntary determination letters
2. completes audits
3. interpret existing regulations, revenue rulings, and private letter rulings

Question 3

What is the role of the DOL in the regulation of tax-advantaged retirement plans? (4)

Answer 3

1. enforces reporting and disclosure rules
2. polices investments (prohibited transactions and exclusive benefit rule)
3. polices fiduciaries
4. interprets legislation

Question 4

What is the role of the PBGC in the regulation of tax-advantaged retirement plans? (4)

Answer 4

• An insurance program for DB plans.
• Excludes organizations with 25 or fewer employees (less than 26)
• Excludes government plans
• Oversees fund solvency, all terminations, legal interpretation

Question 5

Name the Post-ERISA trends. (5)

Answer 5

1. reduce/removed tax advantages
2. simplification of 401(k) administration
3. increase in pension contribution limits and funding standards
4. controlled group

Question 6

ERISA did NOT established the ________ requirements.

Answer 6

top-heavy