4. Characteristics of profit-sharing plans include all of the following with the

Question

4. Characteristics of profit-sharing plans include all of the following with the exception of:

A) A predetermined formula is used to allocate employer contributions to individual employees and to establish benefit payments.

B) Forfeitures of benefits under the plan may be reallocated to the remaining participants.

C) Annual employer contributions are not required, but substantial, recurring contributions must be made to satisfy the requirement that the plan be permanent

D) The company must make contributions to the plan if it has profits during the year.

Explanation / Answer

The company must make contributions to the plan if it has profits during the year is not true. Option D is correct

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