Defined Contribution Flashcards
1
Q
Who controls the investment choices in a defined contribution plan?
A
employees
2
Q
For a defined contribution plan:
-What is the annual additions limit?
-What is the max deductible employer contribution?
A
-lesser of 69,000 or 100% of participant’s covered compensation
-25% of covered payroll
3
Q
Is there a guaranteed final benefit in a defined contribution plan?
A
no
4
Q
What is the max compensation considered in the benefit formula?
A
$345,000
5
Q
Who bears investment risk in a defined contribution plan?
A
participant
6
Q
what is the vesting in a defined contribution plan?
A
at least as generous as 3-year cliff or 2-6 year graded
7
Q
are employer contributions mandatory in a defined contribution plan?
A
only in pensions
8
Q
Does PBGC insurance cover defined contribution plans?
A
no
