Question 7 Which of the following nay be used to help a plan meet the actual con

Question

Question 7

Which of the following nay be used to help a plan meet the actual contribution percentages (ACP) test for matching contributions under Code section 401(m)?

(1) a plan that meets the requirements for a SIMPLE 401k plan
(2) the average ratio of contributions to income is not less than 125%
(3) a safe harbor plan that satisfies certain requirements including the matching contribution limitation, by not making any match on employee deferrals in excess of 6% of compensation
(4) highly compensated employees cannot contribute to the plan

(1) and (3) only

(1) (2) and (3) only

(2) (3) and (4) only

(1) (2) (3) and (4)

2.5 points

Question 8

In addition to elective salary reduction contributions, which one of the following may be used as an alternative for making contributions into a 401k plan?

employer after-tax matching contributions

employer pre-tax matching contributions

annual bonus received in cash or for contribution to the plan

SEP contributions

2.5 points

Question 9

To which of the following pre-retirement distributions will a 10% tax penalty NOT APPLY to any amount subject to ordinary income tax?

(1) to purchase a second (vacation) home
(2) upon the employee's disability
(3) payments that exceed the amount of medical expenses deductible as an itemized deduction for the year
(4) upon separation from service after age 55

(1) and (3) only

(2) and (4) only

(1) (2) and (3) only

(2) (3) and (4)

2.5 points

Question 10

Which of the following might be considered as alternatives to an age-weighted profit sharing plan while providing many of the same "targeted" benefits?

(1) 401k plan
(2) defined benefit plan
(3) money purchase plans
(4) nonqualified deferred compensation plan

(1) and (3) only

(1) (2) and (3) only

(2) (3) and (4) only

(1) (2) (3) and (4)

(1) and (3) only

(1) (2) and (3) only

(2) (3) and (4) only

(1) (2) (3) and (4)

Explanation / Answer

A

(1) and (3) only

C

annual bonus received in cash or for contribution to the plan

B

(2) and (4) only

C

(2) (3) and (4) only

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