Retirement plans

Question 1

Non-deductible contributions are typically associated with a

Answer 1

Roth IRA’s

Question 2

Mike has inherited his father’s traditional IRA. As beneficiary, he will pay
taxes on any money withdrawn.

Answer 2

Income

Question 3

Which of the following is NOT a federal requirement of a qualified plan?

Answer 3

Employee must be able to make unlimited contributions

Question 4

Dana is an employee who deposits a percentage of her income into her
individual annuity. Her company also contributes a percentage into a
separate company pension plan. What kind of annuity is this considered?

Answer 4

Qualified retirement annuity

Question 5

Erica is 35 years old and owns an IRA. At what age can she begin to
receive distributions without a tax penalty?

Answer 5

59 1/2

Question 6

Under a 10-year vesting schedule, what percentage of employer
contributions must be vested after 10 years of service?

Answer 6

100%

Question 7

Which of these retirement plans do NOT qualify for a federal income tax
deduction?

Answer 7

Roth IRA

Question 8

Which of the following employers is required to follow ERISA regulations?

Answer 8

A local electrical supply company with 12 employees

Question 9

How are contributions made to a Roth IRA handled for tax purposes?

Answer 9

Not tax deductible

Question 10

What area of group health insurance is regulated under the Employee
Retirement Security Act of 1974 (ERISA)?

Answer 10

Disclosure and reporting

Question 11

Within how many days must a Traditional IRA be rolled over to another
IRA in order to avoid tax consequences?

Answer 11

60

Question 12

Retirement plans are prevented from favoring highly compensated
employees under which government regulation?

Answer 12

Non-discrimination 

Question 13

A rollover from a Traditional IRA to another IRA MUST be done within
days to ayoid tax consequences.

Answer 13

60

Question 14

Under a Traditional IRA, interest earned is taxed

Answer 14

Upon distribution

Question 15

Employer contributions to qualified plans are

Answer 15

Tax-deductible by the employer

Question 16

Which of the following would disqualify a company’s retirement plan from
receiving favorable tax treatment?

Answer 16

It’s temporary

Question 17

ESOPs are typically invested in

Answer 17

Employer stock

Question 18

Within how many days must a rollover be completed in order to avoid
being taxed as current income?

Answer 18

60

Question 19

Which of these statements concerning Traditional IRAs is CORRECT?

Answer 19

Earnings are taxable when withdrawal

Question 20

How are Roth IRA’s treated for tax purposes?

Answer 20

Nondeductible contributions and tax free distribution

Question 21

Who were Keogh plans designed to provide pension benefits for?

Answer 21

Self employed

Question 22

An example of a tax-qualified retirement plan would be a(n)

Answer 22

Define contribution plan

Question 23

What does ESOP stand for?

Answer 23

Employee stock ownership plan.

Question 24

Retirement plans cannot favor highly compensated employs. The
government regulation that prevents this from happening is called

Answer 24

Nondiscrimination

Question 25

All of the following are exempt from the 10% tax penalty for early
qualified plan withdrawals EXCEPT

Answer 25

Stock purchase

Question 26

When a qualified plan starts making payments to its recipient, which
portion of the distributions is taxable?

Answer 26

Gains

Question 27

A Roth IRA owner must be at least what age in order to make tax-free
withdrawals?

Answer 27

59 1/2 and owned account for a min of 5 years.

Question 28

Rob has a benefit at work which enables him to defer his current receipt
of income and have it paid at a later date, when he will probably be in a
lower tax bracket. Which benefit fits this description?

Answer 28

Deferred compensation option