Retirement Plan Design & Administration 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 Retirement Plan Design & Administration flashcards as text
A plan uses permitted disparity (Social Security integration) under IRC §401(l). In a profit-sharing plan, what is the maximum excess contribution rate above the base contribution rate?
Answer: The lesser of the base rate or 5.7%
For profit-sharing plans using permitted disparity, the excess rate may not exceed the lesser of the base contribution rate or 5.7% (the integration limit).
Which event triggers the requirement that a defined benefit plan provide a qualified preretirement survivor annuity (QPSA) to a surviving spouse?
Answer: Vested participant dies before annuity starting date
A QPSA must be provided if a vested participant dies before the annuity starting date, protecting the surviving spouse's interest in the accrued benefit.
Under the look-back year rule for determining HCE status, a compensation threshold of $155,000 (2024) applies to which year?
Answer: The preceding calendar year
HCE status based on compensation uses the preceding year's compensation compared to the threshold in effect for the preceding year.
A plan sponsor amends a defined benefit plan to eliminate the early retirement subsidy for future accruals. Is this permissible under ERISA's anti-cutback rule?
Answer: Yes, if eliminated only for future accruals with proper notice to participants
ERISA §204(g) prohibits eliminating an early retirement subsidy on benefits already accrued, but prospective elimination for future accruals with proper notice is permissible.
In plan administration, what is the purpose of a Summary Plan Description (SPD)?
Answer: To inform participants and beneficiaries of their rights, benefits, and plan procedures in understandable language
The SPD is a required ERISA disclosure document that explains the plan's features, eligibility, benefits, claims procedures, and participant rights in plain language.
Which plan design feature allows a defined contribution plan to receive an allocation of forfeitures for the plan year in which they arise, rather than restoring them to terminated participants who return?
Answer: The plan document specifies forfeitures are used to reduce employer contributions or reallocated to remaining participants
Forfeitures in DC plans may be used to reduce employer contributions or reallocated among remaining participants, as specified in the plan document.
A defined benefit plan has a plan year ending December 31, 2024. What is the latest deadline to make minimum required contributions without incurring excise tax under IRC §4971?
Answer: 8.5 months after the plan year end (August 15, 2025)
Under IRC §430, minimum required contributions must generally be made by 8.5 months after the plan year end (August 15 for a calendar-year plan) to avoid excise tax.