QKA 1 PRACTICE EXAM STUDY EXAM WITH CORRECT ACTUAL
QUESTIONS AND CORRECTLY WELL DEFINED ANSWERS LATEST
ALREADY GRADED A+
A plan cannot satisfy ACP Safe Harbor test without meeting these requirements: - (answer)-Satisfy ADP
test
-match can only be made on deferrals up to first 6% of comp
-rate of match cannot increase as rate of deferrals increases
-after-tax contributions always subject to ACP test
Cross-tested allocation method is NOT ________ - (answer)a design based safe harbor allocation.
Nondiscrimination must be performed every year
When salaries are the same, older participants may receive a larger allocation
TRUE or FALSE: A plan may satisfy ADP safe harbor test and not satisfy ACP safe harbor test -
(answer)TRUE
What matching formula satisfies traditional ADP safe harbor - (answer)traditional ADP safe harbor
matching must be at least 100% of the first 3%, plus 50% of deferrals on 2% deferred
what characteristics does a 403(b) need to be exempt from ERISA - (answer)-only contribution source is
elective deferral
-participation is voluntary
-employer involvement is limited
Characteristics of a pension plan - (answer)-subject to minimum funding requirement
-may not make hardship distributions
-payments may be paid as an annuity
-ESOPS must be funded with stock of employer
Options for a profit sharing plan for the reallocation of forfeitures - (answer)-paying plan expenses
,QKA 1 PRACTICE EXAM STUDY EXAM WITH CORRECT ACTUAL
QUESTIONS AND CORRECTLY WELL DEFINED ANSWERS LATEST
ALREADY GRADED A+
-reducing employer contributions
-using it for additional contributions
may be utilized annually, but not accumulated year by year
Can a QJSA be paid if the spouse does not consent? - (answer)yes: it can be paid regardless of spouse's
consent. consent is required when payments besides annuity are requested.
TRUE or FALSE: In a defined contribution plan, a participants benefit is based solely on the value of the
account balance - (answer)TRUE
It is uncommon for a small company to have a deferral only 401(k) plan because of two rules: -
(answer)Top heavy and non discrimination
What is an employer contribution made to all employees regardless of and not tied to employee
deferrals? - (answer)Nonelective contributions
TRUE or FALSE: money purchase plans adopted in 2025 do not permit employee elective deferrals -
(answer)True
TRUE or FALSE: a stock bonus plan has the same contribution and allocation formula as a profit sharing
plan - (answer)TRUE
What plan type is designed to invest primarily in employer stock/securities - (answer)ESOP (Employee
Stock Ownership Plan)
What is the maximum number of hours of service a SEP plan may require for an allocation - (answer)no
minimum number of hours may be required
, QKA 1 PRACTICE EXAM STUDY EXAM WITH CORRECT ACTUAL
QUESTIONS AND CORRECTLY WELL DEFINED ANSWERS LATEST
ALREADY GRADED A+
TRUE or FALSE: A SEP may not impose restrictions on withdrawals, employees can withdraw all funds
anytime - (answer)TRUE
TRUE or FALSE: a Simple 401(k) plan is a qualified plan subject to ERISA rules, but contributions are made
to each participants IRA - (answer)FALSE: the plan is subject to ERISA rules, but contributions are made
to the plan's trust (not IRAs)
Contributions under a 403(b) can only be made to - (answer)- an annuity contract provided through
insurance co.
-custodial account invested in mutual funds
-retirement account setup for church employees
403(b) plans are sometimes referred to as ____ - (answer)tax sheltered annuity plans
The gateway test is only required when: - (answer)a plan wants to test allocations for nondiscrimination
using cross-testing
What two ways to satisfy the gateway tests? - (answer)1 each NHCE receives allocation of 5% of 415
comp
2 allocation rate of any NHCE is at least 1/3 of the highest allocation for any HCE
TRUE or FALSE: a plan cannot require an employee to be employed at the end of the year to receive an
allocation - (answer)FALSE: a plan can require employees to be employed at the end of the plan year
if the plan imposes service condition, it cannot be more than 1000 hours
Method for correcting excess annual additions - (answer)can be corrected by reallocating such amounts
to other participants
plan can also refund after-tax contributions/deferrals, or hold excess amounts in a suspense account
QUESTIONS AND CORRECTLY WELL DEFINED ANSWERS LATEST
ALREADY GRADED A+
A plan cannot satisfy ACP Safe Harbor test without meeting these requirements: - (answer)-Satisfy ADP
test
-match can only be made on deferrals up to first 6% of comp
-rate of match cannot increase as rate of deferrals increases
-after-tax contributions always subject to ACP test
Cross-tested allocation method is NOT ________ - (answer)a design based safe harbor allocation.
Nondiscrimination must be performed every year
When salaries are the same, older participants may receive a larger allocation
TRUE or FALSE: A plan may satisfy ADP safe harbor test and not satisfy ACP safe harbor test -
(answer)TRUE
What matching formula satisfies traditional ADP safe harbor - (answer)traditional ADP safe harbor
matching must be at least 100% of the first 3%, plus 50% of deferrals on 2% deferred
what characteristics does a 403(b) need to be exempt from ERISA - (answer)-only contribution source is
elective deferral
-participation is voluntary
-employer involvement is limited
Characteristics of a pension plan - (answer)-subject to minimum funding requirement
-may not make hardship distributions
-payments may be paid as an annuity
-ESOPS must be funded with stock of employer
Options for a profit sharing plan for the reallocation of forfeitures - (answer)-paying plan expenses
,QKA 1 PRACTICE EXAM STUDY EXAM WITH CORRECT ACTUAL
QUESTIONS AND CORRECTLY WELL DEFINED ANSWERS LATEST
ALREADY GRADED A+
-reducing employer contributions
-using it for additional contributions
may be utilized annually, but not accumulated year by year
Can a QJSA be paid if the spouse does not consent? - (answer)yes: it can be paid regardless of spouse's
consent. consent is required when payments besides annuity are requested.
TRUE or FALSE: In a defined contribution plan, a participants benefit is based solely on the value of the
account balance - (answer)TRUE
It is uncommon for a small company to have a deferral only 401(k) plan because of two rules: -
(answer)Top heavy and non discrimination
What is an employer contribution made to all employees regardless of and not tied to employee
deferrals? - (answer)Nonelective contributions
TRUE or FALSE: money purchase plans adopted in 2025 do not permit employee elective deferrals -
(answer)True
TRUE or FALSE: a stock bonus plan has the same contribution and allocation formula as a profit sharing
plan - (answer)TRUE
What plan type is designed to invest primarily in employer stock/securities - (answer)ESOP (Employee
Stock Ownership Plan)
What is the maximum number of hours of service a SEP plan may require for an allocation - (answer)no
minimum number of hours may be required
, QKA 1 PRACTICE EXAM STUDY EXAM WITH CORRECT ACTUAL
QUESTIONS AND CORRECTLY WELL DEFINED ANSWERS LATEST
ALREADY GRADED A+
TRUE or FALSE: A SEP may not impose restrictions on withdrawals, employees can withdraw all funds
anytime - (answer)TRUE
TRUE or FALSE: a Simple 401(k) plan is a qualified plan subject to ERISA rules, but contributions are made
to each participants IRA - (answer)FALSE: the plan is subject to ERISA rules, but contributions are made
to the plan's trust (not IRAs)
Contributions under a 403(b) can only be made to - (answer)- an annuity contract provided through
insurance co.
-custodial account invested in mutual funds
-retirement account setup for church employees
403(b) plans are sometimes referred to as ____ - (answer)tax sheltered annuity plans
The gateway test is only required when: - (answer)a plan wants to test allocations for nondiscrimination
using cross-testing
What two ways to satisfy the gateway tests? - (answer)1 each NHCE receives allocation of 5% of 415
comp
2 allocation rate of any NHCE is at least 1/3 of the highest allocation for any HCE
TRUE or FALSE: a plan cannot require an employee to be employed at the end of the year to receive an
allocation - (answer)FALSE: a plan can require employees to be employed at the end of the plan year
if the plan imposes service condition, it cannot be more than 1000 hours
Method for correcting excess annual additions - (answer)can be corrected by reallocating such amounts
to other participants
plan can also refund after-tax contributions/deferrals, or hold excess amounts in a suspense account
