Retirement Planning Flashcards
1
Q
Highly compensated employee
A
> 5% owner (this year or last year)
Compensation above $130,000 (unless in top 20% of employees)
2
Q
Key employee
A
> 5% owner
1% owner + comp > $150K
Officer + comp > $185K
3
Q
Cash balance plans
A
- quasi-separate accounts
- actuarily determined
- favors younger EEs
- 3 year vesting
4
Q
Money purchase plans
A
- mandatory funding
- favors younger EEs
5
Q
Target benefit plans
A
- age-based contributions
- favors older EEs
- actuary services at inception
6
Q
NUA formula
A
FMV on date of distribution
Less: value of date of ER contribution
= net unrealized appreciation
7
Q
Eligible designated beneficiary - IRAs
A
Access to stretch feature:
- surviving spouse
- child of IRA owner (before age of majority)
- chronically disabled
- someone who isn’t more than 10 years younger
8
Q
VEBA
A
- Tax-exempt trust
- out-of-pocket reimbursement for healthcare
- no retirement or commuting benefits
- ER deducts contributions
- No income on contributions for EE
