Series 65 – Uniform Investment Adviser Law Exam Retirement Plans and Taxation 2

Question 1

A SEP-IRA allows employers to contribute up to what percentage of an employee's compensation (subject to the annual dollar limit)?

Accepted Answer

25%

Answer

10%

Answer

15%

Answer

50%

Question 2

What distinguishes a SIMPLE IRA from a SEP-IRA?

Accepted Answer

SIMPLE IRAs allow employee salary deferrals; SEP-IRAs are funded only by employers

Answer

SEP-IRAs allow employee salary deferrals; SIMPLE IRAs are funded only by employers

Answer

Both allow employee salary deferrals with no employer contribution required

Answer

SIMPLE IRAs have higher contribution limits than SEP-IRAs

Question 3

Under a 403(b) plan, which of the following types of employers is eligible to sponsor the plan?

Accepted Answer

Tax-exempt organizations and public school systems

Answer

Publicly traded corporations

Answer

S-corporations with fewer than 100 employees

Answer

Partnerships and sole proprietorships

Question 4

When a participant rolls over funds from a 401(k) plan to a Traditional IRA, what is the tax treatment if done as a direct rollover?

Accepted Answer

The rollover is tax-free and penalty-free with no withholding

Answer

The rollover is a taxable event subject to 20% mandatory withholding

Answer

The rollover is taxable but exempt from the 10% penalty

Answer

The rollover triggers a 10% penalty only if under age 59½

Question 5

Which of the following best describes 'vesting' in a qualified retirement plan?

Accepted Answer

The employee's ownership rights over employer-contributed funds over time

Answer

The tax treatment applied to employer contributions at distribution

Answer

The maximum contribution percentage allowed by the IRS

Answer

The process of converting a defined benefit plan to a defined contribution plan

Question 6

What type of retirement account is exclusively available to self-employed individuals and small business owners, allowing contributions both as employee and employer?

Accepted Answer

Solo 401(k)

Answer

SIMPLE IRA

Answer

403(b)

Answer

457 plan

Question 7

Which retirement plan is available to state and local government employees and allows deferrals without the 10% early withdrawal penalty upon separation from service at any age?

Accepted Answer

457(b) governmental plan

Answer

401(k) plan

Answer

403(b) plan

Answer

Defined benefit pension plan