QKA® – QUALIFIED 401(K) ADMINISTRATOR
PRACTICE EXAM | 100 MULTIPLE-CHOICE
QUESTIONS WITH DETAILED ANSWER
EXPLANATIONS (2026 EDITION)
1. What is the primary purpose of a 401(k) plan?
A. To provide health insurance
B. To provide retirement savings through employer-sponsored tax
advantages
C. To provide unemployment benefits
D. To provide life insurance
Answer: B
Rationale: A 401(k) plan is a qualified defined contribution retirement plan
designed to help employees save for retirement with tax advantages.
2. Under a traditional 401(k) plan, employee elective deferrals are generally
made:
A. After taxes
B. Before federal income taxes
C. After Social Security taxes only
D. After Medicare taxes only
Answer: B
Rationale: Traditional elective deferrals reduce taxable income for federal income
tax purposes but remain subject to FICA taxes.
, 3. Which Internal Revenue Code section governs 401(k) cash or deferred
arrangements?
A. IRC §125
B. IRC §401(k)
C. IRC §403(b)
D. IRC §457
Answer: B
Rationale: IRC Section 401(k) specifically authorizes cash or deferred arrangements
within qualified retirement plans.
4. Who is considered the plan sponsor?
A. The recordkeeper
B. The investment advisor
C. The employer establishing the plan
D. The third-party administrator
Answer: C
Rationale: The employer that establishes and maintains the retirement plan is the
plan sponsor.
5. A Summary Plan Description (SPD) is intended to:
A. Replace the official plan document
B. Explain plan provisions in understandable language
C. Serve as the trust agreement
D. Replace participant statements
Answer: B
Rationale: The SPD summarizes plan provisions in plain language for participants.
, 6. The official governing document of a qualified retirement plan is the:
A. Investment policy statement
B. Payroll register
C. Plan document
D. Annual report
Answer: C
Rationale: The plan document legally establishes and governs plan operations.
7. Which agency primarily enforces fiduciary standards under ERISA?
A. IRS
B. Department of Labor
C. SEC
D. FINRA
Answer: B
Rationale: The U.S. Department of Labor enforces ERISA fiduciary provisions.
8. ERISA fiduciaries must act:
A. For employer profits
B. Solely in participants' and beneficiaries' interests
C. According to employee requests
D. According to investment performance
Answer: B
Rationale: ERISA requires fiduciaries to act exclusively in the interest of
participants and beneficiaries.
9. The person responsible for holding plan assets is typically the:
A. Payroll manager
B. Trustee
, C. Benefits coordinator
D. Human resources assistant
Answer: B
Rationale: Trustees are responsible for safeguarding and managing plan assets.
10.A participant becomes entitled to employer contributions according to the:
A. Payroll schedule
B. Vesting schedule
C. Investment menu
D. Tax calendar
Answer: B
Rationale: Vesting schedules determine ownership of employer contributions.
11.Employee elective deferrals are always:
A. Subject to vesting
B. Immediately 100% vested
C. Vested after one year
D. Vested after retirement
Answer: B
Rationale: Employee contributions are always fully vested.
12.Which contribution is voluntary by the employee?
A. Matching contribution
B. Profit-sharing contribution
C. Elective deferral
D. Nonelective contribution
Answer: C
PRACTICE EXAM | 100 MULTIPLE-CHOICE
QUESTIONS WITH DETAILED ANSWER
EXPLANATIONS (2026 EDITION)
1. What is the primary purpose of a 401(k) plan?
A. To provide health insurance
B. To provide retirement savings through employer-sponsored tax
advantages
C. To provide unemployment benefits
D. To provide life insurance
Answer: B
Rationale: A 401(k) plan is a qualified defined contribution retirement plan
designed to help employees save for retirement with tax advantages.
2. Under a traditional 401(k) plan, employee elective deferrals are generally
made:
A. After taxes
B. Before federal income taxes
C. After Social Security taxes only
D. After Medicare taxes only
Answer: B
Rationale: Traditional elective deferrals reduce taxable income for federal income
tax purposes but remain subject to FICA taxes.
, 3. Which Internal Revenue Code section governs 401(k) cash or deferred
arrangements?
A. IRC §125
B. IRC §401(k)
C. IRC §403(b)
D. IRC §457
Answer: B
Rationale: IRC Section 401(k) specifically authorizes cash or deferred arrangements
within qualified retirement plans.
4. Who is considered the plan sponsor?
A. The recordkeeper
B. The investment advisor
C. The employer establishing the plan
D. The third-party administrator
Answer: C
Rationale: The employer that establishes and maintains the retirement plan is the
plan sponsor.
5. A Summary Plan Description (SPD) is intended to:
A. Replace the official plan document
B. Explain plan provisions in understandable language
C. Serve as the trust agreement
D. Replace participant statements
Answer: B
Rationale: The SPD summarizes plan provisions in plain language for participants.
, 6. The official governing document of a qualified retirement plan is the:
A. Investment policy statement
B. Payroll register
C. Plan document
D. Annual report
Answer: C
Rationale: The plan document legally establishes and governs plan operations.
7. Which agency primarily enforces fiduciary standards under ERISA?
A. IRS
B. Department of Labor
C. SEC
D. FINRA
Answer: B
Rationale: The U.S. Department of Labor enforces ERISA fiduciary provisions.
8. ERISA fiduciaries must act:
A. For employer profits
B. Solely in participants' and beneficiaries' interests
C. According to employee requests
D. According to investment performance
Answer: B
Rationale: ERISA requires fiduciaries to act exclusively in the interest of
participants and beneficiaries.
9. The person responsible for holding plan assets is typically the:
A. Payroll manager
B. Trustee
, C. Benefits coordinator
D. Human resources assistant
Answer: B
Rationale: Trustees are responsible for safeguarding and managing plan assets.
10.A participant becomes entitled to employer contributions according to the:
A. Payroll schedule
B. Vesting schedule
C. Investment menu
D. Tax calendar
Answer: B
Rationale: Vesting schedules determine ownership of employer contributions.
11.Employee elective deferrals are always:
A. Subject to vesting
B. Immediately 100% vested
C. Vested after one year
D. Vested after retirement
Answer: B
Rationale: Employee contributions are always fully vested.
12.Which contribution is voluntary by the employee?
A. Matching contribution
B. Profit-sharing contribution
C. Elective deferral
D. Nonelective contribution
Answer: C
