RPA 1 - Final Exam 100 Questions with Complete and Certified Solutions

RPA 1 - Final Exam 100 Questions with Complete and Certified Solutions Top-hat plan 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 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. 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 public college Contributions to a profit sharing plan must be made on 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 25 percent Federal law defines normal retirement age to be the age specified in the plan, but it cannot occur beyond the later of 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? 5 years For all defined contribution plans, there is a uniform employer deduction limit of 25% of compsensation How did the Pension Protection Act of 2006 change requirements for investment advice provided to individual retirement account (IRA) owners? 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: 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: 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: Wages In addition to current income taxation, any excess contribution to an individual retirement account (IRA) is subject to a nondeductible excise tax of: 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: A higher amount Key employees, for purposes of the top-heavy rules, include all: 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