Types Of Retirment Plans

Question 1

Defined Contribution(qualified plan/ERISA)

Answer 1

Vesting schedule/administration costs/exempt from creditors/integrated with Social Security

Question 2

Money purchase pension Keys

Answer 2

1. up to 25% employer deduction
2. Fixed contributions.
3. Stable cash flow needed.

Question 3

Target benefit pension, Keys

Answer 3

1. Up to 25% employer deduction
2. Fixed contributions.
3. Stable cash flow needed.
4. Favors older employees.

Question 4

Profit sharing plan

Answer 4

1. Up to 25% employer deduction.
2. Flexible contributions recurring insubstantial.
3. 401(k) provisions $22,500.
4. Simple 401(k) is exempt from creditors.

Question 5

Stock bonus plan

Answer 5

1. Up to 25% employer, deduction
2. Flexible contributions.
3. 100% of the contribution can be invested in company stock
4. Aesop cannot be integrated with Social Security or cross tested.

Question 6

Defined benefit pension (qualified plan/ERISA/PBGC)

Answer 6

1. Favors older employee/owner, age 50+
2. Guaranteed retirement benefit amount.
3. Requires very stable cash flow.
4. Past service credits allowed.
   (Type is cash balance plan)

Question 7

Simple IRA

Answer 7

1. Four small employers (100 or fewer employees)
2. Requires employer match.
3. Salary reduction limit up to $15,500
4. Company cannot have another plan.

Question 8

SEP IRA - No salary deferrals

Answer 8

1. Up to 25% contribution for owner W-2/up to 18.59% contribution for self-employed.
2. Account immediately vested.
3. Can be integrated with Social Security
4. Special eligibility: 21+ years old paid minimum $750 worked three out of five years.

Question 9

SARSEP

Answer 9

1. May have up to 25 employees and 50% of the eligible employees must defer
2. Must have been in existence before 12/31/96
3. Salary deduction limit $22,500.
4. New employees may participate in SARSEP if established before 97.

Question 10

403b Keys TSA/TDA

Answer 10

1. 4501 C3 organization, and public schools.
2. Subject to ERISA only employer contributes.
3. Salary reduction limit up to $22,500.
4. Employer contributions may be subject to vesting schedule.

Question 11

DB/DC Salary Cap

Answer 11

$330,000

Question 12

Simple, IRA salary cap

Answer 12

$516,667

Question 13

DC max contribution

Answer 13

$66,000 or $73,500 if 50+

Question 14

DB max contribution

Answer 14

Stuff it like a pig

Question 15

Tandem

Answer 15

Wrong answer

Question 16

IRA, Keys (simple, Sep, SARSEP)

Answer 16

No loans.
No life insurance.
Immediate vesting
May not be creditor protected.
59 1/2 not 55 for no 10% penalty.
Must take RMD’s at 73.

Question 17

Section 415 Limits

Answer 17

Salary deferral
Company match
Company up to 25%
Forfeitures
Total: $66,000