1. Ellen Satter, age 59, wants to establish a retirement plan for her business that will allow her to retire in 6 years. She expects to earn $200,000 and estimates that she will need to save an additional $60,000 in order to fund her retirement goal. She currently employs 4 part time employees earning between $20,000 and $30,000 in salary. Assuming that the business has strong cash flows, what would be the most appropriate retirement plan for Ellen to establish?

(a) Defined benefit

(b) Money purchase

(c) Stock bonus

(d) Thrift plan

(e) Profit sharing

2. Which of the following statements concerning defined-contribution plans with contribution formulas that are integrated with Social Security is correct?

(a) Only money-purchase pension plans can have a formula that integrates with Social Security.

(b) A plan with a formula that integrates with Social Security must be tested every year to ensure the plan does not violate the non-discrimination requirements.

(c) The maximum integration level is covered compensation.

(d) If the integration level is the taxable wage base and employees receive a contribution of 3 percent of total compensation, an additional 3 percent can be contributed for compensation in excess of the taxable wage base.