CRPC - Chartered Retirement Planning Counselor Employer-Sponsored Retirement Plans Questions and Answers

Question 1

A 54-year-old client participates in their company's 401(k) plan and wants to maximize their personal contributions for 2024.
Based on IRS limits for 2024, what is the maximum total elective deferral this client can contribute to their plan?

Accepted Answer

$30,500

Answer

$23,000

Answer

$30,000

Answer

$69,000

Question 2

A small business owner wants to establish a retirement plan. They desire a plan that only allows for employer contributions, providing them with the flexibility to skip contributions in years when profits are low. Which of the following plans best meets these specific requirements?

Accepted Answer

SEP IRA

Answer

SIMPLE IRA

Answer

Safe Harbor 401(k)

Answer

Solo 401(k)

Question 3

Under the Pension Protection Act of 2006 (PPA), which of the following is a permissible vesting schedule for employer *nonelective* (profit-sharing) contributions made to a defined contribution plan?

Accepted Answer

2 to 6-year graded vesting

Answer

5-year cliff vesting

Answer

2 to 7-year graded vesting

Answer

100% immediate vesting only

Question 4

A 45-year-old employee takes a $20,000 hardship withdrawal from their traditional 401(k) to prevent foreclosure on their principal residence. Assuming their marginal federal tax rate is 22%, what are the total tax consequences of this distribution?

Accepted Answer

$6,400, consisting of a 10% penalty and ordinary income tax

Answer

$2,000 penalty only

Answer

$4,400 in ordinary income tax only

Answer

$0, as foreclosure prevention is a penalty-free and tax-free withdrawal reason

Question 5

A qualified retirement plan is considered 'top-heavy' for a plan year if, as of the determination date, the account balances of key employees exceed what percentage of the total plan assets?

Accepted Answer

60%

Answer

50%

Answer

75%

Answer

25%

Question 6

A public school district wants to offer a retirement plan that allows its teachers to make salary deferral contributions. Which type of plan is specifically designed for public schools and other 501(c)(3) organizations?

Accepted Answer

403(b) Plan

Answer

SEP IRA

Answer

401(k) Plan

Answer

457(b) Plan

A 54-year-old client participates in their company's 401(k) plan and wants to maximize their personal contributions for 2024.Based on IRS limits for 2024, what is the maximum total elective deferral this client can contribute to their plan?

A 54-year-old client participates in their company's 401(k) plan and wants to maximize their personal contributions for 2024.
Based on IRS limits for 2024, what is the maximum total elective deferral this client can contribute to their plan?