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Employee Benefits Law & Regulatory Updates Flashcards

7 cards from real CPC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Employee Benefits Law & Regulatory Updates flashcards as text

  1. Under IRC Section 415, what is the 2024 annual addition limit for defined contribution plans?

    Answer: $69,000

    For 2024, IRC Section 415(c) limits total annual additions to defined contribution plans to $69,000 (or 100% of compensation if less).

  2. Which ERISA provision requires plans to provide a summary of material modifications (SMM) within how many days after the end of the plan year in which a material change was adopted?

    Answer: 210 days

    Under ERISA Section 104(b)(1), an SMM must be furnished within 210 days after the end of the plan year in which the material modification was made.

  3. A 401(k) plan sponsor wants to add an auto-escalation feature that automatically increases deferral rates. Which safe harbor under ERISA exempts this from the prohibited transaction rules relating to plan expenses?

    Answer: Qualified Automatic Contribution Arrangement (QACA) safe harbor

    A QACA provides a safe harbor from ADP/ACP testing and requires auto-enrollment with auto-escalation, starting at a minimum 3% deferral rate increasing to at least 6%.

  4. Which federal law extended COBRA continuation coverage from 18 months to up to 36 months for qualified beneficiaries who experience a second qualifying event during the initial 18-month period?

    Answer: ERISA Section 602

    ERISA Section 602 provides that a second qualifying event (such as death or divorce) during the initial 18-month COBRA period extends coverage up to 36 months from the original qualifying event.

  5. Under the ACA's employer shared responsibility provisions, applicable large employers (ALEs) with 50 or more full-time equivalents must offer minimum essential coverage to what percentage of full-time employees to avoid the Section 4980H(a) penalty?

    Answer: 95%

    Under IRC Section 4980H(a), ALEs must offer minimum essential coverage to at least 95% of full-time employees (and their dependents) to avoid the employer mandate penalty.

  6. Under SECURE 2.0, Roth contributions to SIMPLE and SEP IRAs became permissible beginning in which year?

    Answer: 2023

    SECURE 2.0 Section 601 permitted employer plans to offer Roth contributions to SIMPLE IRAs and SEP IRAs effective for tax years beginning after December 29, 2022 (i.e., 2023).

  7. Which prohibited transaction exemption (PTE) permits a plan fiduciary to receive compensation for investment advice if it meets best interest, impartial conduct, and disclosure standards?

    Answer: PTE 2020-02

    PTE 2020-02 (Improving Investment Advice for Workers & Retirees) allows fiduciaries to receive otherwise-prohibited compensation if they satisfy impartial conduct standards and provide required disclosures.