LO.1 Indicate whether the following statements apply to a pension plan (P), a pr
ID: 2596438 • Letter: L
Question
LO.1 Indicate whether the following statements apply to a pension plan (P), a profit sharing plan (PS), both (B), or neither (N): a. Forfeited amounts can be used to reduce future contributions by the employer. b. Allocation of forfeitures may discriminate in favor of the prohibited group Chighly compensated employees). c. Forfeitures can revert to the employer. d. Forfeitures can be allocated to participants and increase plan benefits. e. An annual benefit of $60,000 could be payable on behalf of a participant. f. More favorable to employees who are older at the time the qualified plan is adopted.Explanation / Answer
A.B =forfeited amount can be used to reduce future contribution by the employer for both plans pension plan as well profit sharing plan.
B.N =allocation of forfeited amount can not be discriminated for privileged group for any of the plan
C.N=forfeiture can not be reverted to employer.
D.B=yes forfeiture can be allocated to participants
E.N=Annual benefit can't be payable on behalf of participants
F.=N=No biasness in either of plan participants could be old as well as new.
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