CRPC Employer-Sponsored Retirement Plans 5

Question 1

What is the required beginning date for required minimum distributions (RMDs) for most participants in employer-sponsored plans under SECURE 2.0?

Accepted Answer

April 1 following the year the participant turns 73

Answer

Under SECURE 2.0 (effective 2023), the RMD starting age increased to 73, with distributions due by April 1 of the following year.

Question 2

A company establishes an ESOP (Employee Stock Ownership Plan). Which of the following best describes how an ESOP works?

Accepted Answer

The plan trust borrows money to purchase employer stock and allocates shares to employee accounts

Answer

A leveraged ESOP borrows money to buy employer stock, repays the loan with employer contributions, and allocates shares to participants over time.

Question 3

Under the 'still working' exception to RMDs, a participant in a 401(k) who continues working past age 73 can defer RMDs from their current employer's plan. Which group does NOT qualify for this exception?

Accepted Answer

5% owners of the sponsoring employer

Answer

5% owners must begin RMDs at age 73 regardless of employment status and cannot use the still-working exception.

Question 4

Which of the following retirement plans is NOT subject to ERISA's fiduciary standards?

Accepted Answer

Governmental 457(b) plan for a state university

Answer

Governmental plans are exempt from ERISA, so a state university's 457(b) plan is not subject to ERISA fiduciary rules.

Question 5

A Qualified Domestic Relations Order (QDRO) allows a divorcing spouse to receive a share of a participant's retirement plan benefits. Which type of plan is NOT subject to a QDRO?

Accepted Answer

IRA

Answer

QDROs apply to ERISA-governed qualified plans; IRAs are divided using a transfer incident to divorce, not a QDRO.

CRPC - Chartered Retirement Planning Counselor Practice Test

CRPC - Chartered Retirement Planning Counselor Practice Test

CRPC Employer-Sponsored Retirement Plans 5