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Question1

Which of the following statements is (are) true for a target benefit plan?

(1) It favors older participants. (2) It requires actuarial assumptions. (3) The maximum contribution is 100% of payroll. (4) The maximum individual allocation is the lesser of 100% of pay or $55,000. a.

(1) and (4) only b.

(2) and (3) only c.

(1), (2), and (4) only d.

(4) only e.

(1) and (3) only Question 2

Jake has worked for GT for the last 20 years and been a participant in its defined benefit plan. In the last ten years, his salary has increased significantly. Over the last ten years, his compensation was $290,000, $100,000, $120,000, $100,000, $240,000, $200,000, $160,000, $180,000, $150,000, and $210,000. In 2018, what is the most that he could receive as a pension payment?

A.

$200,000. B.

$220,000 C.

$246,667. D.

$275,000

Question 3 A defined benefit pension plan has a funding formula equal to 1% x years of service x final salary. If Jims final salary is $600,000 and Jim has earned 30 years of service, what is Jims retirement benefit in 2018? A.

$82,500 B.

$180,000 C.

$220,000 D.

$275,000 Question 6

Marleen is a 52-year-old participant in the XYZ cash balance plan. She has been a participant in the plan for the last twenty years. XYZ, which has over 10,000 employees, is having financial difficulty and Marleen is concerned about the security of her pension. Which of the following is correct?

A.

The cash balance plan assets may include up to 25% of XYZ stock.

B.

The cash balance plan formula cannot be lowered in the future for current participants, but could be changed for new participants.

C.

The cash balance plan and its benefits are fully protected by the PBGC.

D.

Termination of the plan may affect vesting for some employees, but Marleens vesting will not be impacted.