Cebs GBA/RPA - Modules 1-3 Questions with correct Answers

ERISA Title I - Answer- Intended to provide protections to plan participants and beneficiaries. Includes certain pension funding and vesting provisions ERISA Title Ii - Answer- Amended the IRS Code. Primarily includes various requirements that must be met so a plan can be tax favored or designated as a qualified plan. ERISA Title Ii - Answer- Includes a provision that created individual retirement accounts. IRA - Answer- Savings accounts that offer large tax breaks. ERISA Title III - Answer- Contains procedures for coordination of ERISA enforcement between the DOL and Treasury Department. ERISA Title IV - Answer- Created the Pension Benefit Guarantee Corporation. Pension Benefit Guaranty Corporation (PBGC) - Answer- Congress set up to ensure the defined benefit pensions of American workers. Defined Benefit Pension Plans - Answer- Traditional pensions that pay a certain amount each month after one retires. ERISA Title IV - Answer- Contains the procedures that all defined benefit plans must follow in order to terminate their plans. ERISA - Answer- Employee Retirement Income Security Act ERISA - Answer- Regulatory framework for private retirement plans as well as employee benefit plans. 1974 - Answer- Congress passed landmark legislation to protect workers pensions from abuses. Required minimum funding Provided uniform vesting schedules Provided a standard definition of employee service for benefit accrual - Answer- Changes brought by ERISA legislation 1. There must be a plan, fund or program 2. The plan fund or program is established or maintained by ER 3. Is for purpose of providing specifically listed benefits, through purchase of insurance or otherwise 4. Benefits are provided to participants and beneficiaries - Answer- 4 basic elements of EE welfare benefit plan Government plans - Answer- Type of plan NOT covered by ERISA Church plan - Answer- Type of plan NOT covered by ERISA Plan maintained to comply with state laws and workers comp, unemployment, or mandated disability insurance - Answer- Type of plan NOT covered by ERISA Plans maintained outside the US primarily for non-resident aliens - Answer- Type of plan NOT covered by ERISA Plans that cover self employed individuals and that cover no "common law" employees - Answer- Type of plan NOT covered by ERISA Plans that cover only married shareholders of corporation - Answer- Type of plan NOT covered by ERISA 1. Medical, surgical, or hospital care or benefits 2. Benefits in event of sickness, accident, disability, death or unemployment 3. Apprenticeship or other other training benefits 4. Day car centers 5. Scholarship funds 6. Prepaid legal services - Answer- Provided by ERISA health and welfare plans Medical, dental, vision, Rx, drug or alcohol treatment, FSAs, EAP, wellness, AD&D, STD and LTD benefits - Answer- Examples of ERISA health and welfare plans Cafeteria plans, 125 plans, Premium only plans (POP), premium conversion plans, pre tax premium plans (however the benefits funded by them are often subject to ERISA) Dependent care assistance plans HSAs (if ER involvement is limited) PTO Adoption assistance plans State mandated benefits Educational assistance or tuition reimbursement On site clinics (first aid only) - Answer- Plans that do not generally apply to ERISA 1978- Revenue Act PL 95-600 - Answer- Formalized the notion of 401k plan 1980-Miscellaneous Revenue Act PL 96-1036 - Answer- Expanded the ER aggregation rules for testing the qualified status of retirement plans to include affiliated service groups 1980-Multiemployer Pension Plan Amendments Act PL 96-364 - Answer- Increased security of defined benefit pension plans by creating the idea of withdrawal liability when an employer ceases to participate in an ongoing multi employer plan; increased the premium rate for plans covered by then Pension Benefit Guaranty Group; accelerated plan funding 1984-Requirement Equity Act PL 98-397 - Answer- Accelerated vesting; increased recognition of past service for persons with gaps in employment history; established spousal rights through qualified domestic relations orders 1986-Tax Reform Act PL 99-514 - Answer- Tightened the rules governing the tax exempt status of retirement plans in terms of nondiscrimination coverage 1990-Omnibus Budget Reconciliation Act PL 101-508 - Answer- Granted the department of Labor authority to impose a 20% penalty on parties for a fiduciary breach, even if those parties were not themselves fiduciaries 2006-Pension Protection Act PL 109-280 - Answer- Accelerated funding requirements for defined benefit plans; increased disclosure requirements to plan participants; cleared up uncertainty on status of cash balance plans SPD - Answer- Document that is provided to plan participants to explain their rights and benefits under the welfare benefit plan and must be written in a manner calculated to be understood by average plan participant. Plan administrator - Answer- Legally responsible for providing SPD Wrapper plan document - Answer- Typical way of supplementing an insurance company's certificate of coverage or insurance ce contract with the missing ERISA provisions 1. In hand delivery to EEs 2. First class mail 3. Second or third class mail 4. Inclusion in union or company publication 5. Electronic distribution (if methods is accepted by DOL) - Answer- Acceptable methods of distributing required ERISA disclosure documents No employer endoresement - Answer- ER cannot express positive normative judgement and cannot urge employee participation Plan administrator/plan sponsor - Answer- Person with statutory responsibility for ensuring that all of the required filings with the federal government are timely made and is the person upon whom the statute imposes authority to make important disclosures to participants about plan benefits. Usually employer. Participant - Answer- Employees in or reasonably expected to be n, currently covered employment. Beneficiary - Answer- Any person designated by a participant (or by the terms of an ERISA plan) who is or may become entitled to a benefit under the plan. Has rights under plan in question. May sue under ERISA. Has right to examine and request copies of plan documents. Plan document - Answer- Describes plans terms and conditions related to operation and administration of plan. $110 per day - Answer- Fine if plan document is not provided within 30 days Every 10 years - Answer- How often a new SPD must be distributed to plan participants 1. Eliminates benefits payable under plan 2. Reduces benefits payable 3. Increases fed, copays, or other amounts 4. Reduces service area 5. Establishes new requirements - Answer- Material reduction SAR - Answer- Summary of certain information contained in a plans 5500 annual report/return, along with notification to participants of their rights under ERISA to receive additional information. $2,063 per day - Answer- Fine for not filing 5500 by 7/31 Sick pay - Answer- Usually provided by ERs so that EEs do not lose wages when they are absent from work because of brief minor illnesses, such as cold or flu. Cafeteria plan - Answer- Type of benefit plan permitted by IRS §125 in which the ER offers EEs a choice, much like a menu, of benefits that are either in the form of taxable cash compensation or tax free (qualified) benefits. Must include at least one taxable and one qualified benefit. 1. Plan fiduciary names 2. Policies and procedures relating to plan administration 3. Funding requirements 4. Description of how benefit payments will be made 5. Claims and appeals procedures 6. Plan amendment and termination authority and procedures 7. Method for distribution of plan assets upon plan termination 8. Statement that plan assets can be used to pay reasonable costs of a plan administration - Answer- Plan document inclusions 1. Summary of plan provisions 2. Initial SPD must be distributed to pots and beneficiaries within 120 days 3. Must be distributed by 210th day following close of relevant plan year 4. New pots must be provided an SPD within 90 days of becoming plan ppt 5. Must be written easily understood language - Answer- Common SPD requirements Carry out responsibilities delegated by the Board of Governors of an organization regarding the strategic direction of financial reserves, with the objective of protecting an institutes financial position and supporting an institutes mission and goals - Answer- Purpose of investment committee A legal obligation of one party to act in the best interest of another party - Answer- Understanding fiduciary responsibility Windsor Effect - Answer- Extended federal tax and benefit rights to couples in same sex marriages 1. Written plan document 2. SPD 3. Summary of material modification 4. Form 5500 (annual financial report) 5. Summary annual report - Answer- Main ERISA reporting requirments Investment Policy Statement (IPS) - Answer- Foundation for how retirement plan investment program is expected to operate. 1. Statement of purpose 2. Statement of roles and responsibilities 3. Asset allocation 4. Investment goals and objectives 5. Investment guidelines 6. Investment performance review and evaluation - Answer- Well constructed IPS components ERISA Title I - Answer- Administered by US department of labor ERISA Title I - Answer- Enacted to address public concern that funds of private pension plans were being mismanaged and abused 401(k) - Answer- Plan offered under cafeteria plan Health and accident insurance plan coversge - Answer- Plan offered under cafeteria plan HSA contributions - Answer- Plan offered under cafeteria plan Long term and short term disability coverage - Answer- Plan offered under cafeteria plan Cobra continuation coverage premiums - Answer- Plan offered under cafeteria plan Investment committee charter - Answer- Defined governing body Investment policy statement (IPS) - Answer- Describes plan and its purpose Market driven approach - Answer- Refers to a business or market approach that is primarily based on the understanding the specific features of the market and then reacting to those features and behaviors of the players within the market Established under ERISA if, from surrounding circumstances, a reasonable person can ascertain the intended benefits, the class of beneficiaries, the source of financing and the procedure to receive benefits - Answer- Plan, fund or program Medical, surgical, or hospital care benefits - Answer- Benefits provided by ERISA health and welfare plans