Employee Benefit Plans

Question 0

Defined Contribution Plan

Answer 0

Company sponsored retirement plan that provides a matching contribution up to a certain amount. All money in the program is 100% vested (owned by employee)

Question 1

Defined Benefit Plan

Answer 1

A corporate pension plan Sponsored by the employer guaranteeing a monthly benefit at retirement. Few companies soon these anymore

Question 2

Qualified Plan

Answer 2

Retirement plan that meets criteria of Employee Retirement Income Security Act (ERISA)
Non discrimination of all eligible employees
Vesting - by the 6th year of employment
Fully funded - up to date w/contributions

Question 3

Non-qualified plans

Answer 3

Plan set up by company to retain my profile the employees.
Contributions are put aside for employee’s retirement fund,
since the plan is discriminatory, it doesn’t qualify for all employees.

Question 4

Traditional IRA

Answer 4

May contribute up to 100% of annual earned income

Must begin receiving payments 1 year after their 70.5 birthday

Question 5

Roth IRA

Answer 5

Contributions from taxable income but payouts are tax free

Free payouts if fund is maintained for 5 years and owner is 59.5

Question 6

Simplified Employee Pension (SEP)

Answer 6

Higher contribution rates than Traditional or Roth IRAs.
Contributions made from salary before taxes
Withdrawals are taxable

Question 7

401k Plan

Answer 7

Additional retirement plan intended to reduce taxable income.
Contributions are non taxable
Earnings are tax deferred
Distributions taxable

Question 8

Educational IRA

Answer 8

Voluntary plan to set up an education fund for beneficiaries under 18. Contributions are not taxable
Contributions are limited to $2000 per year per beneficiary
distributions are free from federal income tax to the beneficiary

Question 9

Tax Sheltered Annuities (TSA)

Answer 9

For employees of public education institutions, tax-exempt nonprofit organization’s and church organizations.
Contributions nontaxable
Earnings accumulate ax deferred
Distributions taxable

Question 10

Thrift Savings Plan (TSP)

Answer 10

Plan for government civil-service employees and retirees as well as members of uniform services. Members may contribute pretax dollars,
matching contributions may be available,
fully vested in contributions and earnings from first day of employment

Question 11

Profit-sharing plan

Answer 11

Please share office. And your contributions made by the company when it has profits to a profit-sharing account for each employee