15. Sally, age 60, has received a $50,000 distribution from $100,000 she is to receive from her ex-husband's (who is age 55) qualified plan account under a qualified domestic relation order (QDRO). Which of the following statements is CORRECT regarding the QDRO and the distributed funds?

I. Irrespective of the plan document, Sally may demand an immediate cash distribution of the remaining funds from the plan trustees.

II. She may roll over the $50,000 distribution into an IRA.

III. Sally's ex-husband is not subject to an early distribution penalty in the execution of the QDRO.

IV. Sally may be required to leave the remaining funds with the plan trustee until the earliest time for distributions under the plan.

A. II, III, and IV

B. I, II, and IV

C. I, II, III, and IV

D. II and III

16. Which of the following describe differences between a tax-advantaged retirement plan and a qualified plan?

I. IRA-funded employer-sponsored tax-advantaged plans may not incorporate loan provisions.

II. Employer stock distributions from a tax-advantaged plan do not benefit from net unrealized appreciation (NUA) tax treatment.

A. I only

B. II only

C. Both I and II

D. Neither I nor II

17. Which of the following are advantages of a SIMPLE IRA?

I. No actual deferral percentage (ADP) or actual contribution percentage (ACP) tests

II. Allows employee pretax contributions

III. Easy to install and administer

IV. Simple to understand and explain to employees

A. I, II, III, and IV

B. I and II

C. II and III

D. I, II, and III

18. Which of the following statements describing how qualified plans are similar to simplified employee pension (SEP) plans and savings incentive match plans for employees (SIMPLEs) is (are) CORRECT?

I. Qualified plans, SEP plans, and SIMPLEs all provide for deferred compensation.

II. Plan sponsors of qualified plans, SEP plans, and SIMPLEs make contributions to either a trust, an insurance contract, or an individual retirement account depending on the type of plan.

A. I only

B. II only

C. Both I and II

D. Neither I nor II

19. Which of the following statements regarding Section 403(b)/tax-sheltered annuity (TSA) plan employee elective deferrals in 2020 is CORRECT?

A. Employer contributions are subject to FICA (Social Security and Medicare) and federal unemployment (FUTA) payroll taxes

B. Employee elective deferrals are subject to FICA (Social Security and Medicare) and FUTA (federal unemployment) payroll taxes

C. The maximum employee elective deferral contribution is $15,000

D. Individuals age 50 and older can make a maximum additional catch-up contribution of $5,000

20. Which of the following are reasons a qualified employer may consider implementing a tax-sheltered annuity (TSA)/Section 403(b) plan?

I. Employees are interested in accumulating retirement funds with pretax dollars.

II. Employees are interested in reducing their taxable income while saving for the future.

III. The employer doesn't want to bear the full cost of a retirement plan.

IV. The employer wants to implement a plan in which the employer can legally discriminate or pick and choose who participates.

A. I, II, and III

B. I, II, III, and IV

C. II, III, and IV

D. I and II

21. Which of the following persons could make tax-deductible contributions to a traditional IRA regardless of their modified adjusted gross income (MAGI)?

A. Gary is self-employed and contributes the maximum to a SEP IRA plan he has for himself and his employees

B. Sara works for a Section 501(c)(3) tax-exempt organization, and she participates in the Section 403(b) plan her employer sponsors

C. Janice, a single taxpayer earning $110,000 per year, defers $19,500 to her employer's Section 401(k) plan

D. Max is 55, employed full time and participates in his employer's Section 457 plan

22. Which of the following statements regarding a nonqualified Roth IRA distribution is NOT correct?

A. A distribution that is made before the 5-year period may not be subject to the 10% penalty

B. Conversion amounts may avoid the 10% penalty for the conversion portion

C. Earnings will always incur a 10% penalty for that portion of the distribution

D. A distribution from an inherited Roth IRA could be subject to income tax

23. Any amount converted from a traditional IRA to a Roth IRA is

A. not included in gross income

B. subject to the 10% early withdrawal penalty at the time of conversion

C. included in taxable income if it is a return of basis

D. not subject to the 10% early withdrawal penalty at the time of conversion

24. Which of the following statements regarding Roth IRAs and pretax 401(k) plans is(are) CORRECT?

I. There are no income limitations to participate in either of these.

II. Roth IRAs require distributions no later than age 70; for the pretax 401(k) plan, there is no requirement to start taking distributions while the participant is alive.

A. II only

B. Neither I nor II

C. I only

D. Both I and II

25. Which of the following retirement accounts require a 20% mandatory withholding requirement on distributions?

I. Simplified employee pension (SEP) plan

II. Money purchase pension plan

III. Traditional profit-sharing plan

IV. Cash balance pension plan

1. I and II
2. II, III, and IV
3. II and III
4. I, III, and IV

26. While Section 403(b) (tax-sheltered annuity plan or TSA) plans are an excellent source of retirement savings, they do have some disadvantages, such as

1. investments are limited to mutual funds and annuities
2. Section 403(b) plans must comply with the actual contribution percentage (ACP) test for employer matching contributions.
3. actual deferral percentage (ADP) testing causes Section 403(b)/TSA plans to be relatively costly and complex to administer.
4. account balances at retirement age are guaranteed to be sufficient to provide adequate retirement amounts for employees who entered the plan at later ages.
5. III and IV
6. I, II, and III
7. I and II
8. I, II, III, and IV

27. Which of the following statements regarding Section 457 plans is (are) CORRECT?

1. Deductibility of plan contributions is an important factor for employers choosing a Section 457 plan to consider.
2. Earnings on assets in a Section 457 plan grow tax-deferred until withdrawn.
3. Required minimum distribution rules do not apply.
4. A Section 457 plan is a nonqualified deferred compensation plan.

1. I, II, III, and IV
2. IV only
3. II and IV
4. II and III

28. Required minimum distributions from a traditional IRA must begin no later than

1. December 31 of the year following the IRA owner's attainment of age 70
2. the year in which the IRA owner attains age 70
3. age 59
4. April 1 of the year following the year in which the IRA owner attains age 70