Chapter 3 Flashcards
Established minimum standards to protect the interests of participants and beneficiaries an employer sponsored retirement plans offered by the private sector
ERISA
What type of plans do not need ERISA standards?
Non-qualified retirement plans
______ Is anyone who has control over any plans management or assets including anyone who gives investment advice about the plan
Fiduciary
Eligibility standards for full-time employees Of a qualified plan include:
Full-time status minimum of 1000 hours per year, employed for 12 months or more, at least 21 years old
A document that describes in writing a summary of the investment plan and what is to be expected from that plan
Investment policy statement (IPS)
Qualify distributions are withdraws that occur after the employee has attained age of
59 1/2
Who is responsible for funding a defined benefit plan?
The employer
A type of defined contribution plan in which the employer contributes a portion of the firms profits each year
Profit sharing plan
A type of defined contribution plan offered to employees of private and public companies
401 k
Retirement plan established by corporations partnerships are sole proprietors self-employed and are designed to be a simple and cost efficient way for smaller employers to meet their employees retirement needs. Employers are allowed to make annual contributions up to 25% of the employees salary. Employees age 21 or older with at least $600 and your income three of the last five years are eligible
SEP PLAN
Simplified Employee Pension
A plan that can be adopted by small businesses that employ 100 or fewer employees and do not have another qualified plan available. Employee must have earned $5000 in compensation during any two years before the current calendar year and is expected to earn at least $5000 for current calendar year. These requirements are the maximum and can be reduced by the employer.
SIMPLE
Savings incentive match plans for employees
Plan referred to as tax sheltered annuity
403B plan
Retirement plan available for eligible employees a public school systems qualified 501C3 nonprofit organizations including religious colleges and universities hospitals and museums contributions are not tax deductible to the employer
403 b plan
Qualified plan subject to ERIS a regulations are used to purchase stock in the employers company and contribute that stock to the employees qualified retirement plan
ESOP
Employee stock ownership plans
A non-qualified retirement plan and which employees differ a portion of their income to a specified later date. These plans can discriminate.
Deferred compensation plans
Nonqualified deferred compensation plans. Government and non-government.
457 Plan
What type of security can you not fund a qualified retirement plan with?
Gold bullion or foreign currency, An annuity. Insurance collectibles antiques rare stamps or coins. Municipal securities are unsuitable investments for qualified accounts.
The method of moving assets from one qualified account to another qualified account where the account holder never touches the assets. Assets are moved from one trustee or custodian directly to another. There is no limit to the number that may occur within a year.
Transfers
Occurs when Funds are moved from one IRA to another IRA and the account owner physically takes possession of the assets. The assets must be placed into a new IRA within 60 days. May take place once per 12 month period for the same funds
Roll over
True or false. Contributions can be withdrawn at any time without taxation and penalties in a Roth IRA
True
