CPC Employee Benefits Law & Regulatory Updates 4

Question 1

A defined benefit plan terminates in a standard termination. Which agency must the plan sponsor notify before distributing plan assets?

Accepted Answer

Pension Benefit Guaranty Corporation (PBGC)

Answer

In a standard termination, the plan sponsor must file a Notice of Intent to Terminate (NOIT) and then a Standard Termination Notice with the PBGC before distributing assets.

Question 2

Under ERISA Section 203, what is the maximum cliff vesting schedule permitted for employer matching contributions in a 401(k) plan?

Accepted Answer

3 years

Answer

ERISA requires that employer matching contributions vest under either 3-year cliff vesting or 6-year graded vesting (2-year cliff for SIMPLE 401(k) plans).

Question 3

Which IRS notice must a plan administrator provide to a participant at least 30 days before an eligible rollover distribution, explaining rollover options and withholding rules?

Accepted Answer

402(f) Notice

Answer

The 402(f) notice (safe harbor rollover notice) must be provided 30–180 days before distribution, informing participants of their right to a direct rollover and the 20% mandatory withholding on taxable distributions.

Question 4

Under ERISA Section 4(b), which type of plan is generally exempt from ERISA coverage?

Accepted Answer

Governmental plans maintained by state and local governments

Answer

ERISA Section 4(b) explicitly exempts governmental plans (federal, state, local) from ERISA's coverage, reporting/disclosure, and fiduciary rules.

Question 5

Under the HEART Act (Heroes Earnings Assistance and Relief Tax Act), what benefit must a plan provide to a participant who dies while performing qualified military service?

Accepted Answer

The survivors must receive any additional benefits that would have been provided if the participant had resumed employment and then died

Answer

The HEART Act requires that plans credit the military service period for benefit accrual and vesting purposes, meaning survivors receive any benefits that would have accrued had the participant returned and then died.

(CPC) Certified Pension Consultant Practice Test

(CPC) Certified Pension Consultant Practice Test

CPC Employee Benefits Law & Regulatory Updates 4