Retirement and Pension Plans Flashcards
6 cards from real CBP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Retirement and Pension Plans flashcards as text
Under ERISA, a plan must provide a Summary Plan Description (SPD) to new participants within how many days of becoming eligible?
Answer: 90 days
ERISA requires that new plan participants receive the SPD within 90 days after becoming covered under the plan.
What is the 'top-heavy' rule in qualified retirement plans?
Answer: A requirement for minimum benefits when key employees hold more than 60% of plan assets
A plan is top-heavy when key employees own more than 60% of the plan's total value, triggering minimum vesting and contribution requirements for non-key employees.
Which IRS form must most private-sector employee benefit plans file annually to report plan information?
Answer: Form 5500
Form 5500 is the annual information return filed with the DOL/IRS to report on the financial condition, investments, and operations of employee benefit plans.
What does 'vesting' mean in the context of employer retirement contributions?
Answer: The employee's non-forfeitable ownership of employer-contributed benefits
Vesting refers to the process by which an employee earns a non-forfeitable right to employer-contributed retirement benefits over time.
Under the SECURE Act, what change was made to the required minimum distribution starting age?
Answer: Raised from 72 to 73 under SECURE 2.0
SECURE 2.0 (2022) raised the RMD starting age from 72 to 73, with a future increase to age 75 phased in starting in 2033.
Which plan feature allows employees to make after-tax contributions to a 401(k) and convert them to Roth status?
Answer: Mega backdoor Roth conversion
The mega backdoor Roth strategy involves making after-tax contributions to a 401(k) (up to plan limits) and then converting or rolling them over to Roth status.