ITEM SET $11$:$401($k$)$ PLANS

Kryptonite is a telecommunications provider located in lowa with hundreds of thousands of employees. Their CEO, Clark Kline, is considering the replacement of their expensive defimed benefit $($DB$)$ pension plan which requires large contributions every year with a $401(k)$ whene the employees will bear the investment risk. The majority of the workforce is young and the top executives ane all in their $50\text{'}$s and $60\text{'}$s$.$

As Clark's top financial advisor, what type of qualified retirement plan would you recommend insteat of the $401(k)$ if he wants the majority of the benefits to accrue to the top executives?

Answer: aplarn in this case?

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Who would benefit the most from the change away from the DB plan to a $401(k)?$

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$4.$ What is the maximum contribution to a $401(k)$ of a worker age $56,$ who earns $$20,000$ per year as a factory worker with Kyptonite?

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Lois Kent has been with Kryptonite for $10$ years but is nervous now that Clark has taken over operations. She wants to know her options regarding taking money out of the $401(k)$ at a later date. You correctly tell her that she can access her $401(k)$ funds without penalty under what eight circumstances?

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$6.$ Clark has heard that the ADP testing is an issue tor plans. What are three ways to minimize this issue?

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