Question 1 Which one of the following is true about employer contributions into
ID: 2624482 • Letter: Q
Question
Question 1
Which one of the following is true about employer contributions into a money purchase plan?
contributions cannot exceed 30% of an employee's compensation
in 2011, the maximum dollar amount of annual contributions to an employee's account cannot exceed $50,000
plan contributions go into a pooled account rather than into individual employee accounts
plan benefits accumulate in individual employee accounts which will be available at retirement or termination of employment
2.5 points
Question 2
Which one of the following provides the greatest amount of flexibility for employer profit sharing plan contributions?
a discretionary provision
a formula provision
a money purchase paired plan provision
a target benefit provision
2.5 points
Question 3
Qualified plans require that the purchase of life insurance be governed by what are described as "incidental limits". What is the limitation on purchasing life insurance in a profit sharing plan?
all amounts in the plan may be used
all amounts that have been in the plan for a least two years may be used
no amount of plan assets may be used
no more than 50% of plan assets may be used
a.contributions cannot exceed 30% of an employee's compensation
b.in 2011, the maximum dollar amount of annual contributions to an employee's account cannot exceed $50,000
c.plan contributions go into a pooled account rather than into individual employee accounts
d.plan benefits accumulate in individual employee accounts which will be available at retirement or termination of employment
Explanation / Answer
D
plan benefits accumulate in individual employee accounts which will be available at retirement or termination of employment
A
a discretionary provision
B
all amounts that have been in the plan for a least two years may be used
plan benefits accumulate in individual employee accounts which will be available at retirement or termination of employment
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