CRC Retirement Plan Design 4

Question 1

Under the 'ratio percentage' test for minimum coverage, a plan must cover at least what percentage of NHCEs relative to the percentage of HCEs covered?

Accepted Answer

70%

Answer

The ratio percentage test requires that the percentage of NHCEs benefiting under the plan be at least 70% of the percentage of HCEs benefiting.

Question 2

A plan that provides different contribution rates to different employee classes must generally pass which IRC section test?

Accepted Answer

Section 401(a)(4) nondiscrimination testing

Answer

IRC Section 401(a)(4) requires that contributions or benefits not discriminate in favor of highly compensated employees, tested through various nondiscrimination tests.

Question 3

Which feature of a safe harbor 401(k) plan eliminates the need to perform the ADP/ACP test?

Accepted Answer

A required employer contribution meeting safe harbor minimums with immediate 100% vesting

Answer

A safe harbor 401(k) plan avoids ADP/ACP testing by requiring the employer to make a specified minimum contribution that is immediately 100% vested.

Question 4

What is the maximum compensation that can be taken into account for qualified plan purposes in 2024?

Accepted Answer

$345,000

Answer

The IRC Section 401(a)(17) compensation limit for qualified plan purposes is $345,000 for 2024.

Question 5

In a top-heavy plan, the minimum employer contribution for non-key employees in a defined contribution plan is:

Accepted Answer

3% of compensation

Answer

When a defined contribution plan is top-heavy, the employer must contribute at least 3% of compensation for each non-key employee who participates.

(CRC) Certified Retirement Counselor Practice Test

(CRC) Certified Retirement Counselor Practice Test

CRC Retirement Plan Design 4