CPM CPM Retirement Plans & 401(k) Administration

Question 1

What is the IRS elective deferral contribution limit for a 401(k) plan for employees under age 50 in 2024?

Accepted Answer

$23,000

Answer

The IRS set the 401(k) elective deferral limit at $23,000 for 2024.

Question 2

Which IRS form must an employer file annually to report information about a retirement plan's financial condition and operations?

Accepted Answer

Form 5500

Answer

Form 5500 is the annual return/report that plan administrators file with the DOL and IRS.

Question 3

Under the catch-up contribution rules, how much additional can employees age 50 or older contribute to a 401(k) in 2024?

Accepted Answer

$7,500

Answer

Employees age 50 or older may contribute an additional $7,500 as a catch-up contribution to a 401(k) in 2024.

Question 4

What is a 'safe harbor' 401(k) plan?

Accepted Answer

A plan that automatically passes ADP/ACP nondiscrimination tests by meeting certain employer contribution requirements

Answer

A safe harbor 401(k) satisfies ADP/ACP nondiscrimination tests automatically when the employer makes specified matching or nonelective contributions.

Question 5

What does the term 'vesting schedule' refer to in a 401(k) plan?

Accepted Answer

The timeline over which employer contributions become the employee's permanent property

Answer

A vesting schedule defines when employer contributions become non-forfeitable (owned outright) by the employee.

(CPM) Certified Payroll Manager Practice Test