RPA 1 - Final Exam 100 Questions With
Correct Answers
Top-hat |plan |- |CORRECT |ANSWER✔✔-A |retirement |plan |that |is |unfunded |and |maintained |by |
an |employer |primarily |for |the |purpose |of |providing |deferred |compensation |for |a |"select |group
|of |management |or |highly |compensated |employees" |is |called |a |(n):
Economic |Benefit |- |CORRECT |ANSWER✔✔-A |theory |of |income |taxation |that |imposes |current |
tax |liability |on |taxpayers |who |receive |something |of |reasonable |value |is |known |as |the |doctrine |
of:
Must |be |given |the |election |to |remain |under |the |pre-amendment |vesting |schedule |for |both |
pre-and |post-amendment |benefit |accruals. |- |CORRECT |ANSWER✔✔-An |employee |with |four |
years |of |service |participates |in |a |retirement |plan. |The |vesting |schedule |in |this |plan |is |changed |
by |plan |amendment. |Under |tax |law, |this |plan |participant:
An |example |of |a |sponsor |of |a |403(b) |plan |is |- |CORRECT |ANSWER✔✔-public |college
Contributions |to |a |profit |sharing |plan |must |be |made |on |- |CORRECT |ANSWER✔✔-A |substantial |
and |reoccurring |basis
Employees |withdrawing |contributions |from |a |savings |incentive |match |plan |for |employees |
(SIMPLE |plan) |individual |retirement |account |(IRA) |during |the |two-year |period |beginning |on |the
|date |of |initial |participation |are |subject |to |a |penalty |tax |of |- |CORRECT |ANSWER✔✔-25 |percent
Federal |law |defines |normal |retirement |age |to |be |the |age |specified |in |the |plan, |but |it |cannot |
occur |beyond |the |later |of |- |CORRECT |ANSWER✔✔-Age |65 |or |the |fifth |anniversary |of |the |
participant's |date |of |initial |participation
,For |a |distribution |from |a |Roth |IRA |account |to |receive |favorable |tax |treatment |as |a |qualified |
distribution, |how |long |must |contributions |be |in |the |account? |- |CORRECT |ANSWER✔✔-5 |years
For |all |defined |contribution |plans, |there |is |a |uniform |employer |deduction |limit |of |- |CORRECT |
ANSWER✔✔-25% |of |compsensation
How |did |the |Pension |Protection |Act |of |2006 |change |requirements |for |investment |advice |
provided |to |individual |retirement |account |(IRA) |owners? |- |CORRECT |ANSWER✔✔-The |Act |
requires |that |fees |for |such |advice |not |be |contingent |on |the |investment |option |chosen.
If |a |contribution |to |a |profit |sharing |plan |exceeds |the |maximum |deductible |contribution |limit, |
the |employer |can |carryover |the |excess |contribution |to |the |succeeding |year, |but |will |be |subject
|to |an |excise |tax |on |the |excess |contribution |of: |- |CORRECT |ANSWER✔✔-10 |percent
If |you |knew |that |a |vendor |servicing |a |401(k) |plan |was |clearing |trades |internally |and |not |using |
an |outside |directed |trustee, |you |generally |could |conclude |that: |- |CORRECT |ANSWER✔✔-The |
vendor |was |providing |plan |services |as |a |bundled |service |provider.
In |1948 |the |National |Labor |Relations |Board |(NLRB) |found |that |the |provisions |of |retirement |
plans |affect |conditions |of |employment |and |that |retirement |benefits |constitute: |- |CORRECT |
ANSWER✔✔-Wages
In |addition |to |current |income |taxation, |any |excess |contribution |to |an |individual |retirement |
account |(IRA) |is |subject |to |a |nondeductible |excise |tax |of: |- |CORRECT |ANSWER✔✔-6 |percent
n |general, |the |aggregate |amount |of |employer |contribution |allocated |to |a |younger |employee |
under |a |defined |contribution |plan |compared |to |that |under |a |defined |benefit |plan |is: |- |
CORRECT |ANSWER✔✔-A |higher |amount
, Key |employees, |for |purposes |of |the |top-heavy |rules, |include |all: |- |CORRECT |ANSWER✔✔-One |
percent |owners |receiving |annual |compensation |in |excess |of |$150,000
Of |all |of |the |following |factors |in |the |Black-Scholes |option |pricing |model, |which |one |is |generally
|deemed |to |have |the |most |relative |impact |on |the |value |of |the |option? |- |CORRECT |
ANSWER✔✔-The |expected |volatility |of |the |underlying |stock's |market |price
The |annual |limit |on |deferral |amounts |for |an |ineligible |Section |457 |plan |is |- |CORRECT |
ANSWER✔✔-Unlimited
The |limitation |on |exclusions |for |elective |deferrals |under |401(k) |plans |is: |- |CORRECT |
ANSWER✔✔-Indexed |in |increments |established |by |the |Economic |Growth |and |Tax |Relief |
Reconciliation |Act |(EGTRRA)
The |most |frequently |used |criterion |to |establish |participation |in |a |supplemental |executive |
retirement |plan |(SERP) |is: |- |CORRECT |ANSWER✔✔-Position |and |management |status
The |Supreme |Court |ruled |in |Arizona |Governing |Committee |v. |Norris |that: |- |CORRECT |
ANSWER✔✔-Life |annuities |under |an |employer-sponsored |defined |contribution |plan |must |be |
provided |on |a |uniform |basis
The |vesting |provision |of |executive |retirement |arrangements: |- |CORRECT |ANSWER✔✔-Varies |
depending |on |the |intent |of |the |executive |arrangement
Those |questioning |the |validity |of |the |human |depreciation |concept |of |private |pensions |would |
argue |that |the |employer |should |be |held |responsible |only |for |the |increase |in |the |rate |of |aging |
caused |by: |- |CORRECT |ANSWER✔✔-Occupational |hazards
To |receive |tax-preferred |treatment |under |an |ineligible |Section |457 |plan, |amounts |deferred |
must |be |- |CORRECT |ANSWER✔✔-Subject |to |a |substantial |risk |of |forfeiture
Correct Answers
Top-hat |plan |- |CORRECT |ANSWER✔✔-A |retirement |plan |that |is |unfunded |and |maintained |by |
an |employer |primarily |for |the |purpose |of |providing |deferred |compensation |for |a |"select |group
|of |management |or |highly |compensated |employees" |is |called |a |(n):
Economic |Benefit |- |CORRECT |ANSWER✔✔-A |theory |of |income |taxation |that |imposes |current |
tax |liability |on |taxpayers |who |receive |something |of |reasonable |value |is |known |as |the |doctrine |
of:
Must |be |given |the |election |to |remain |under |the |pre-amendment |vesting |schedule |for |both |
pre-and |post-amendment |benefit |accruals. |- |CORRECT |ANSWER✔✔-An |employee |with |four |
years |of |service |participates |in |a |retirement |plan. |The |vesting |schedule |in |this |plan |is |changed |
by |plan |amendment. |Under |tax |law, |this |plan |participant:
An |example |of |a |sponsor |of |a |403(b) |plan |is |- |CORRECT |ANSWER✔✔-public |college
Contributions |to |a |profit |sharing |plan |must |be |made |on |- |CORRECT |ANSWER✔✔-A |substantial |
and |reoccurring |basis
Employees |withdrawing |contributions |from |a |savings |incentive |match |plan |for |employees |
(SIMPLE |plan) |individual |retirement |account |(IRA) |during |the |two-year |period |beginning |on |the
|date |of |initial |participation |are |subject |to |a |penalty |tax |of |- |CORRECT |ANSWER✔✔-25 |percent
Federal |law |defines |normal |retirement |age |to |be |the |age |specified |in |the |plan, |but |it |cannot |
occur |beyond |the |later |of |- |CORRECT |ANSWER✔✔-Age |65 |or |the |fifth |anniversary |of |the |
participant's |date |of |initial |participation
,For |a |distribution |from |a |Roth |IRA |account |to |receive |favorable |tax |treatment |as |a |qualified |
distribution, |how |long |must |contributions |be |in |the |account? |- |CORRECT |ANSWER✔✔-5 |years
For |all |defined |contribution |plans, |there |is |a |uniform |employer |deduction |limit |of |- |CORRECT |
ANSWER✔✔-25% |of |compsensation
How |did |the |Pension |Protection |Act |of |2006 |change |requirements |for |investment |advice |
provided |to |individual |retirement |account |(IRA) |owners? |- |CORRECT |ANSWER✔✔-The |Act |
requires |that |fees |for |such |advice |not |be |contingent |on |the |investment |option |chosen.
If |a |contribution |to |a |profit |sharing |plan |exceeds |the |maximum |deductible |contribution |limit, |
the |employer |can |carryover |the |excess |contribution |to |the |succeeding |year, |but |will |be |subject
|to |an |excise |tax |on |the |excess |contribution |of: |- |CORRECT |ANSWER✔✔-10 |percent
If |you |knew |that |a |vendor |servicing |a |401(k) |plan |was |clearing |trades |internally |and |not |using |
an |outside |directed |trustee, |you |generally |could |conclude |that: |- |CORRECT |ANSWER✔✔-The |
vendor |was |providing |plan |services |as |a |bundled |service |provider.
In |1948 |the |National |Labor |Relations |Board |(NLRB) |found |that |the |provisions |of |retirement |
plans |affect |conditions |of |employment |and |that |retirement |benefits |constitute: |- |CORRECT |
ANSWER✔✔-Wages
In |addition |to |current |income |taxation, |any |excess |contribution |to |an |individual |retirement |
account |(IRA) |is |subject |to |a |nondeductible |excise |tax |of: |- |CORRECT |ANSWER✔✔-6 |percent
n |general, |the |aggregate |amount |of |employer |contribution |allocated |to |a |younger |employee |
under |a |defined |contribution |plan |compared |to |that |under |a |defined |benefit |plan |is: |- |
CORRECT |ANSWER✔✔-A |higher |amount
, Key |employees, |for |purposes |of |the |top-heavy |rules, |include |all: |- |CORRECT |ANSWER✔✔-One |
percent |owners |receiving |annual |compensation |in |excess |of |$150,000
Of |all |of |the |following |factors |in |the |Black-Scholes |option |pricing |model, |which |one |is |generally
|deemed |to |have |the |most |relative |impact |on |the |value |of |the |option? |- |CORRECT |
ANSWER✔✔-The |expected |volatility |of |the |underlying |stock's |market |price
The |annual |limit |on |deferral |amounts |for |an |ineligible |Section |457 |plan |is |- |CORRECT |
ANSWER✔✔-Unlimited
The |limitation |on |exclusions |for |elective |deferrals |under |401(k) |plans |is: |- |CORRECT |
ANSWER✔✔-Indexed |in |increments |established |by |the |Economic |Growth |and |Tax |Relief |
Reconciliation |Act |(EGTRRA)
The |most |frequently |used |criterion |to |establish |participation |in |a |supplemental |executive |
retirement |plan |(SERP) |is: |- |CORRECT |ANSWER✔✔-Position |and |management |status
The |Supreme |Court |ruled |in |Arizona |Governing |Committee |v. |Norris |that: |- |CORRECT |
ANSWER✔✔-Life |annuities |under |an |employer-sponsored |defined |contribution |plan |must |be |
provided |on |a |uniform |basis
The |vesting |provision |of |executive |retirement |arrangements: |- |CORRECT |ANSWER✔✔-Varies |
depending |on |the |intent |of |the |executive |arrangement
Those |questioning |the |validity |of |the |human |depreciation |concept |of |private |pensions |would |
argue |that |the |employer |should |be |held |responsible |only |for |the |increase |in |the |rate |of |aging |
caused |by: |- |CORRECT |ANSWER✔✔-Occupational |hazards
To |receive |tax-preferred |treatment |under |an |ineligible |Section |457 |plan, |amounts |deferred |
must |be |- |CORRECT |ANSWER✔✔-Subject |to |a |substantial |risk |of |forfeiture
