F.50 Key factors affecting plan selection for businesses

Question 1

Which of the following is not a factor to consider when selecting a retirement plan for a business?

A. Employee demographics
B. Plan contribution limits
C. Plan administration fees
D. Employee job titles

Answer 1

D. Employee job titles

F.50 Key factors affecting plan selection for businesses

Question 2

A small business owner is looking for a retirement plan that offers flexibility in contributions and is not subject to nondiscrimination testing. Which plan would be most appropriate?

A. 401(k) plan
B. SIMPLE IRA
C. Defined benefit plan
D. SEP IRA

Answer 2

D. SEP IRA

F.50 Key factors affecting plan selection for businesses

Question 3

A business owner wants to offer a retirement plan to his employees but is concerned about high plan administration fees. Which plan would be most appropriate?

A. Defined benefit plan
B. Profit sharing plan
C. 401(k) plan
D. SIMPLE IRA

Answer 3

D. SIMPLE IRA

F.50 Key factors affecting plan selection for businesses

Question 4

Which of the following retirement plans allows for catch-up contributions for employees over age 50?

A. Defined benefit plan
B. SEP IRA
C. Profit sharing plan
D. 401(k) plan

Answer 4

D. 401(k) plan

F.50 Key factors affecting plan selection for businesses

Question 5

A business owner wants to provide a retirement plan that offers a guaranteed income stream to employees. Which plan would be most appropriate?

A, Defined benefit plan
B. Profit sharing plan
C. 401(k) plan
D. SEP IRA

Answer 5

A. Defined benefit plan

F.50 Key factors affecting plan selection for businesses

Question 6

A business owner wants to offer a retirement plan with the highest contribution limits. Which plan would be most appropriate?

A. Defined benefit plan
B. SEP IRA
C. Profit sharing plan
D. 401(k) plan

Answer 6

A. Defined benefit plan

F.50 Key factors affecting plan selection for businesses

Question 7

Which of the following retirement plans allows for loans to be taken out by participants?

A. Defined benefit plan
B. Profit sharing plan
C. 401(k) plan
D. SEP IRA

Answer 7

C. 401(k) plan

F.50 Key factors affecting plan selection for businesses

Question 8

A business owner wants to offer a retirement plan that allows for employer contributions only. Which plan would be most appropriate?

A. Defined benefit plan
B. SEP IRA
C. Profit sharing plan
D. 401(k) plan

Answer 8

B. SEP IRA

F.50 Key factors affecting plan selection for businesses

Question 9

Which of the following retirement plans is subject to nondiscrimination testing?

A. Defined benefit plan
B. Profit sharing plan
C. 401(k) plan
D. SEP IRA

Answer 9

C. 401(k) plan

401(k) plans are subject to nondiscrimination testing to ensure that contributions are not disproportionately made to highly compensated employees.

F.50 Key factors affecting plan selection for businesses

Question 10

XYZ Company has 50 employees, with a mix of full-time and part-time workers. The business owner wants to offer a retirement plan that is easy to administer and has minimal costs. Which plan would be most appropriate?

A. Defined benefit plan
B. Profit sharing plan
C. 401(k) plan
D. SIMPLE IRA

Answer 10

D. SIMPLE IRA

F.50 Key factors affecting plan selection for businesses

Question 11

ABC Corporation is a large company with over 1,000 employees. The business owner wants to provide a retirement plan that offers a guaranteed income stream to employees. Which plan would be most appropriate?

A. Defined benefit plan
B. Profit sharing plan
C. 401(k) plan
D. SEP IRA

Answer 11

A. Defined benefit plan

F.50 Key factors affecting plan selection for businesses

Question 12

DEF Enterprises is a family-owned business with four employees, including the owner. The business owner wants to offer a retirement plan that allows for catch-up contributions for employees over age 50. Which plan would be most appropriate?

A. Defined benefit plan
B. SEP IRA
C. Profit sharing plan
D. 401(k) plan

Answer 12

D. 401(k) plan

F.50 Key factors affecting plan selection for businesses

Question 13

GHI Corporation is a mid-sized company with 150 employees. The business owner wants to offer a retirement plan that allows for employer contributions only. Which plan would be most appropriate?

A. Defined benefit plan
B. SEP IRA
C. Profit sharing plan
D. 401(k) plan

Answer 13

B. SEP IRA

F.50 Key factors affecting plan selection for businesses

Question 14

JKL Industries is a technology company with a high concentration of highly compensated employees. The business owner wants to offer a retirement plan that maximizes contributions for both highly compensated and non-highly compensated employees. Which plan would be most appropriate?

A. Defined benefit plan
B. Profit sharing plan
C. 401(k) plan
D. SEP IRA

Answer 14

B. Profit sharing plan

F.50 Key factors affecting plan selection for businesses

Question 15

MNO Corporation is a consulting firm with 75 employees, including both full-time and part-time workers. The business owner wants to offer a retirement plan with loans available to participants. Which plan would be most appropriate?

A. Defined benefit plan
B. SEP IRA
C. Profit sharing plan
D. 401(k) plan

Answer 15

D. 401(k) plan

F.50 Key factors affecting plan selection for businesses

Question 16

PQR Company is a small business with 10 employees. The business owner wants to offer a retirement plan that offers a guaranteed income stream to employees. Which plan would be most appropriate?

A. Defined benefit plan
B. SEP IRA
C. Profit sharing plan
D. 401(k) plan

Answer 16

A. Defined benefit plan

F.50 Key factors affecting plan selection for businesses

Question 17

STU Enterprises is a startup company with five employees, including the owner. The business owner wants to offer a retirement plan that is easy to administer and has low costs. Which plan would be most appropriate?

A. Defined benefit plan
B. SEP IRA
C. Profit sharing plan
D. SIMPLE IRA

Answer 17

D. SIMPLE IRA

F.50 Key factors affecting plan selection for businesses

Question 18

VWX Corporation is a manufacturing company with a highly unionized workforce. The business owner wants to offer a retirement plan that is flexible and can be customized to fit the needs of different employee groups. Which plan would be most appropriate?

A. Defined benefit plan
B. SEP IRA
C. Profit sharing plan
D. 401(k) plan

Answer 18

D. 401(k) plan

F.50 Key factors affecting plan selection for businesses

Question 19

XYZ Corporation is a large company with over 500 employees. The business owner wants to offer a retirement plan that is easy to administer and has low costs. Which plan would be most appropriate?

A. Defined benefit plan
B. SEP IRA
C. Profit sharing plan
D. 401(k) plan

Answer 19

D. 401(k) plan

A 401(k) plan offers flexibility for both the employer and employees, allowing employees to contribute pre-tax dollars while employers can choose to match contributions. For large companies like XYZ Corporation, 401(k) plans can benefit from economies of scale, resulting in potentially lower administrative costs. Additionally, 401(k) plans are widely recognized, making them attractive to potential and current employees.

F.50 Key factors affecting plan selection for businesses