Question 1 Life insurance is viewed as favorable in defined benefit plans becaus

Question

Question 1

Life insurance is viewed as favorable in defined benefit plans because it adds to the limit on deductible contributions

True

False

2 points   

Question 2

Some of the advantages of using life insurance in a qualified plan includethe following except:

plan costs for employer are predictable

life insurance is considered to be a very safe investmen

greater rates of return on insurance cash value than alternative investments

retirement benefits can be guaranteed by both the insurance company and employer

low cost installation and service of the plan

2 points   

Question 3

A defined benefit plan can help an older employee in a small business maximize tax-deferred savings.

True

False

2 points   

Question 4

IRS sets a maximum limit on the projected annual benefit that a defined benefit plan can provide a participant.

True

False

2 points   

Question 5

An employee can be covered under both a defined benefit and a defined contribution plan.

True

False

2 points   

Question 6

Which type of plan has benefit levels that are guaranteed by the employer and also the Pension Benefit Guaranty Corporation (PBGC)?

money purchase plan

defined benefit plan

target benefit plan

cross tested plan

tax deferred annuity

2 points   

Question 7

Regarding a cash balance plan, which of the following is (are) true?

the employee bears investment risk

each participant has a hypothetical account that the employer credits at least annually

the plan benefits older workers more than younger workers

1 and 3

2 and 3

2 points   

Question 8

A traditional defined benefit plan and a cash balance plan share the following characteristics:

Pension Benefit Guaranty Corporation coverage

employer bears investment risk

able to use Social Security integration

all of these

only 1 and 2

2 points   

Question 9

If an employer wants to reward an employee

plan costs for employer are predictable

life insurance is considered to be a very safe investmen

greater rates of return on insurance cash value than alternative investments

retirement benefits can be guaranteed by both the insurance company and employer

low cost installation and service of the plan

Explanation / Answer

Question 1

Life insurance is viewed as favorable in defined benefit plans because it adds to the limit on deductible contributions

True

False

2 points   

Question 2

Some of the advantages of using life insurance in a qualified plan includethe following except:

plan costs for employer are predictable

life insurance is considered to be a very safe investment

greater rates of return on insurance cash value than alternative investments

retirement benefits can be guaranteed by both the insurance company and employer

low cost installation and service of the plan

2 points   

Question 3

A defined benefit plan can help an older employee in a small business maximize tax-deferred savings.

True

False

2 points   

Question 4

IRS sets a maximum limit on the projected annual benefit that a defined benefit plan can provide a participant.

True

False

2 points   

Question 5

An employee can be covered under both a defined benefit and a defined contribution plan.

True

False

2 points   

Question 6

Which type of plan has benefit levels that are guaranteed by the employer and also the Pension Benefit Guaranty Corporation (PBGC)?

money purchase plan

defined benefit plan

target benefit plan

cross tested plan

tax deferred annuity

2 points   

Question 7

Regarding a cash balance plan, which of the following is (are) true?

the employee bears investment risk

each participant has a hypothetical account that the employer credits at least annually

the plan benefits older workers more than younger workers

1 and 3

2 and 3

2 points   

Question 8

A traditional defined benefit plan and a cash balance plan share the following characteristics:

Pension Benefit Guaranty Corporation coverage

employer bears investment risk

able to use Social Security integration

all of these

only 1 and 2

2 points   

Question 9

If an employer wants to reward an employee

plan costs for employer are predictable

life insurance is considered to be a very safe investment

greater rates of return on insurance cash value than alternative investments

retirement benefits can be guaranteed by both the insurance company and employer

low cost installation and service of the plan

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