QKA Designation – Exam 1 (2025/2026 Latest
Update) | Qualified 401(k) Administrator |
Complete Exam Prep & Verified Q&A PDF
defined contribution plan - correct answerretirement plan in which the employer sets up
an individual account for each employee and specifies the size of the investment into
that account
401(k) plan - correct answera tax-deferred retirement plan offered to employees by their
employer
401(k) Plan Features - correct answer- can be Profit Sharing or Stock Bonus
- always has elective deferrals
- all employers except government
- combo of employee + employer (matching and nonelective) contributions
Money Purchase Plan - correct answerDefined contribution plan with mandatory
employer contributions and no employee contributions
Money Purchase Plan Features - correct answer- plan that uses a fixed percentage of
employee earnings to defer compensation
- good for organizations with relatively stable earnings percentage is fixed
- contributions must be made every year
- contribution limits are same as profit-sharing plans
pension plan - correct answera retirement plan that is funded at least in part by an
employer
Pension Plan Features - correct answer- plan with minimum funding requirement
- no hardship distributions
profit-sharing plan - correct answeran organization-wide plan that distributes
compensation based on some established formula designed around a company's
profitability
Profit Sharing Plan Features - correct answer- plan with optional employer contributions
- 401(k) feature
- Discretionary employer contribution formula
- flexible distribution rules
- shares profit with all employees
Stock Bonus Plan - correct answera type of profit-sharing plan in which the employer
rewards employees with company stock instead of cash
,Employee Stock Ownership Plan (ESOP) - correct answera company-established
benefits plan in which employees acquire stock, often at below-market prices, as part of
their benefits. can be combined with other DC plan or money purchase plan, or just
stock bonus
403(b) plan - correct answera tax-deferred retirement plan for employees of tax-exempt
organizations
403(b) Plan + ERISA - correct answerPlan that can be exempt from ERISA if they have
no employer contributions and the employer has limited involvement, and is not subject
to ADP/coverage testing
defined benefit plan - correct answerpension plan that guarantees a specified level of
retirement income
Simple employer plan (SEP) - correct answer- Plan for small businesses
- only has employer contributions
- all eligible employees must participate
- low admin
- Pro-rata based on compensation or permitted disparity
Permitted Disparity Formula - correct answer*PD=Excess cont % - Base Cont %*
*DC PD*
Lesser of
i. base contribution % or ii. 5.7%
*DB D*
Lesser of
i. 1/2 excess bene % or ii. 5.7%
Permitted Disparity (Social Security Integration) - correct answerA technique or method
of allocating qualified plan contributions to an employee account that provides a higher
contribution to those employees whose compensation is in excess of the Social Security
wage base ($137,700 for 2020) or selected integration level for the plan year.
SIMPLE IRA - correct answeran IRA for small businesses in which the employer
matches employee contributions
SIMPLE 401(k) - correct answer-a cross between a simple ira and traditional 401(k)
plan and offers some features of both plans.
-employee is vested immediately.
- for small businesses
Retirement Plan Government Requirements - correct answerSatisfying ERISA + IRC
Sec 401(a)
, ERISA - correct answer- Body of law that governs retirement plans
- Governs through DOL or Dept. of Treasury (IRS)
DOL Oversight - correct answerDept. that oversees:
- participant rights
- fiduciary behavior
DOT + IRS Oversight - correct answerDept. that oversees:
- tax issues
- tax benefit qualification (for qualified plans)
ERISA Title I - correct answerIncludes:
- Labor Law Provisions
- DOL Enforced
- Advise employees regarding benefits they offer
- Deliver promised benefits
- Provide claims and appeal procedures
- Manage benefits wisely and for the benefit of its employees, a fiduciary duty
- Not interfere with or retaliate against beneficiaries
ERISA Title II - correct answerIncludes:
- Tax laws
- DOT Enforcement
ERISA Title III - correct answerDivides responsibility between the DOL and Treasury
Department.
ERISA Title IV - correct answerContains the procedures that all defined benefit plans
must follow in order to terminate their plans + PBGC
Reasonable Administration Fees - correct answero Investment costs
o Investment Advice fees
o Reporting
o Printing and mailing
o Other retirement benefit fees
Plan Disqualification Consequences - correct answer- Changes to tax deductions
- Vested contributions = income
- Income taxes
- Ineligible distributions
- Late filing penalties
- Criminal offenses, breach of fiduciary responsibility, fines
Plan Document - correct answerA legal document detailing the specific plan provisions
selected by the plan sponsor to meet retirement plan and business goals (adoption
agreement + basic plan doc)
Update) | Qualified 401(k) Administrator |
Complete Exam Prep & Verified Q&A PDF
defined contribution plan - correct answerretirement plan in which the employer sets up
an individual account for each employee and specifies the size of the investment into
that account
401(k) plan - correct answera tax-deferred retirement plan offered to employees by their
employer
401(k) Plan Features - correct answer- can be Profit Sharing or Stock Bonus
- always has elective deferrals
- all employers except government
- combo of employee + employer (matching and nonelective) contributions
Money Purchase Plan - correct answerDefined contribution plan with mandatory
employer contributions and no employee contributions
Money Purchase Plan Features - correct answer- plan that uses a fixed percentage of
employee earnings to defer compensation
- good for organizations with relatively stable earnings percentage is fixed
- contributions must be made every year
- contribution limits are same as profit-sharing plans
pension plan - correct answera retirement plan that is funded at least in part by an
employer
Pension Plan Features - correct answer- plan with minimum funding requirement
- no hardship distributions
profit-sharing plan - correct answeran organization-wide plan that distributes
compensation based on some established formula designed around a company's
profitability
Profit Sharing Plan Features - correct answer- plan with optional employer contributions
- 401(k) feature
- Discretionary employer contribution formula
- flexible distribution rules
- shares profit with all employees
Stock Bonus Plan - correct answera type of profit-sharing plan in which the employer
rewards employees with company stock instead of cash
,Employee Stock Ownership Plan (ESOP) - correct answera company-established
benefits plan in which employees acquire stock, often at below-market prices, as part of
their benefits. can be combined with other DC plan or money purchase plan, or just
stock bonus
403(b) plan - correct answera tax-deferred retirement plan for employees of tax-exempt
organizations
403(b) Plan + ERISA - correct answerPlan that can be exempt from ERISA if they have
no employer contributions and the employer has limited involvement, and is not subject
to ADP/coverage testing
defined benefit plan - correct answerpension plan that guarantees a specified level of
retirement income
Simple employer plan (SEP) - correct answer- Plan for small businesses
- only has employer contributions
- all eligible employees must participate
- low admin
- Pro-rata based on compensation or permitted disparity
Permitted Disparity Formula - correct answer*PD=Excess cont % - Base Cont %*
*DC PD*
Lesser of
i. base contribution % or ii. 5.7%
*DB D*
Lesser of
i. 1/2 excess bene % or ii. 5.7%
Permitted Disparity (Social Security Integration) - correct answerA technique or method
of allocating qualified plan contributions to an employee account that provides a higher
contribution to those employees whose compensation is in excess of the Social Security
wage base ($137,700 for 2020) or selected integration level for the plan year.
SIMPLE IRA - correct answeran IRA for small businesses in which the employer
matches employee contributions
SIMPLE 401(k) - correct answer-a cross between a simple ira and traditional 401(k)
plan and offers some features of both plans.
-employee is vested immediately.
- for small businesses
Retirement Plan Government Requirements - correct answerSatisfying ERISA + IRC
Sec 401(a)
, ERISA - correct answer- Body of law that governs retirement plans
- Governs through DOL or Dept. of Treasury (IRS)
DOL Oversight - correct answerDept. that oversees:
- participant rights
- fiduciary behavior
DOT + IRS Oversight - correct answerDept. that oversees:
- tax issues
- tax benefit qualification (for qualified plans)
ERISA Title I - correct answerIncludes:
- Labor Law Provisions
- DOL Enforced
- Advise employees regarding benefits they offer
- Deliver promised benefits
- Provide claims and appeal procedures
- Manage benefits wisely and for the benefit of its employees, a fiduciary duty
- Not interfere with or retaliate against beneficiaries
ERISA Title II - correct answerIncludes:
- Tax laws
- DOT Enforcement
ERISA Title III - correct answerDivides responsibility between the DOL and Treasury
Department.
ERISA Title IV - correct answerContains the procedures that all defined benefit plans
must follow in order to terminate their plans + PBGC
Reasonable Administration Fees - correct answero Investment costs
o Investment Advice fees
o Reporting
o Printing and mailing
o Other retirement benefit fees
Plan Disqualification Consequences - correct answer- Changes to tax deductions
- Vested contributions = income
- Income taxes
- Ineligible distributions
- Late filing penalties
- Criminal offenses, breach of fiduciary responsibility, fines
Plan Document - correct answerA legal document detailing the specific plan provisions
selected by the plan sponsor to meet retirement plan and business goals (adoption
agreement + basic plan doc)
