Reference no: EM131460310
1) In 2015, if Rick is 57 years old and his salary is $50,000, the maximum he can contribute to his 401(k) plan through salary deferral is:
a) $18,000
b) $24,000
c) $50,000
d) $53,000
2) In 2015, if Dave is 57 years old and his salary is $50,000, the maximum his employer can contribute to his 401(k) plan on a tax deductible basis is:
a) $18,000
b) $24,000
c) $50,000
d) $53,000
3) EJ's . has 250 nonexcludable employees: 10 highly-compensated (HC) and 240 non-highly-compensated (NHC). Nine of the HC and 160 of the NHC are covered in the firm's qualified defined benefit plan. The average accrued benefit for the HC is 10% and the average accrued benefit for the NHC is 6%. Which of the following anti-discrimination tests does this plan fail to satisfy? (select all that apply)
a) safe harbor test
b) ratio percentage test
c) average benefits test
4) You have accumulated $100,000 in a tax qualified plan. You are laid off from your job and decide to use these funds to pay off your mortgage. Which of the following statements best explains the tax effects of this decision?
a) This is not an allowed use of retirement plan assets.
b) You will owe income taxes on the full $100,000.
c) You will owe income taxes on the $100,000 plus a 10% penalty.
d) You will owe income taxes on the $100,000, plus a 10% penalty if you are less than age 59 ½.
5)Many employers offer to match employee contributions to their 401(k) plans up to some limit. Which of the following reasons is an explanation for employer matching? (Select all that apply.)
a)To encourage participation in the plan to meet non-discrimination requirements
b) To encourage workers to save for retirement.
c) Employees value retirement benefits more than they value cash compensation.
d) To be able to give larger dollar contributions to certain groups of employees such as top management.
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