Retirement Plan Design Flashcards
7 cards from real CRC 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 flashcards as text
A married participant in a defined benefit plan must receive benefits in what default form unless the spouse consents to a different option?
Answer: Qualified joint and survivor annuity (QJSA)
ERISA requires that defined benefit plans pay married participants in the form of a qualified joint and survivor annuity (QJSA) unless the spouse consents in writing to an alternative form.
What is the required beginning date for minimum distributions from a 401(k) plan for an employee who is still working and is not a 5% owner?
Answer: April 1 following the year they retire or turn 73, whichever is later
Under SECURE 2.0, a non-5%-owner still working can delay RMDs until April 1 following the later of retirement or attaining age 73.
Which of the following best describes a 'nonelective' safe harbor contribution?
Answer: An employer contribution of at least 3% of compensation made to all eligible employees regardless of whether they defer
A nonelective safe harbor contribution is made to all eligible employees (typically 3% of compensation) regardless of whether or not they choose to defer into the plan.
Under IRC Section 404, employer deduction limits for contributions to a defined contribution plan are generally capped at what percentage of covered payroll?
Answer: 25%
Employer contributions to defined contribution plans are generally deductible up to 25% of the compensation of all eligible plan participants.
A 'floor-offset' arrangement combines a defined benefit plan with a defined contribution plan such that:
Answer: The DB benefit is reduced (offset) by the equivalent annuity value of the DC account balance
In a floor-offset arrangement, the defined benefit plan provides a minimum (floor) benefit reduced by the annuity equivalent of the defined contribution account, limiting total plan cost.
When a qualified plan is terminated, participant account balances or accrued benefits become:
Answer: 100% vested immediately regardless of the vesting schedule
Upon plan termination, all participant benefits become 100% vested immediately, even if participants had not satisfied the normal vesting schedule.
Which regulatory body administers and enforces ERISA's fiduciary, reporting, and disclosure provisions for private-sector retirement plans?
Answer: Department of Labor (DOL)
The Department of Labor (DOL) administers and enforces ERISA's fiduciary standards, reporting, and disclosure requirements for private-sector employee benefit plans.