Kryptonite is a telecommunications provider located in Iowa with hundreds of thousands of employees. Their CEO, Clark Klein, is considering the replacement of their expensive Defined Benefit (DB) Pension Plan which requires large contributions every year with a 401(K) where the employees will bear the investment risk. The majority of the workforce is young, and the top executives are all in their 50s and 60s. Answer the following:

A. Clarks top financial advisor, what type of qualified retirement plan would you recommend instead of the 401(k) if he wants the majority of the benefits to accrue to the top executives?

B. An intern who works for you recommend utilizing a DB/K plan, which is a combination DB and 401(k) plan. What is your opinion of using such a plan in this case?

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

D. What is the maximum contribution to their 401(k) that a factory worker age 56, who earns $20,000 per year with Kryptonite could make?