Question 1: A money purchase pension plan is a defined contribution plan in which

a. the final retirement benefit amount is guaranteed.

b. the employer must contribute 25% of participant compensation each year.

c. the employer receives no tax deduction for the contribution.

d. the maximum annual contribution is the lesser of 100% of eligible compensation or $66,000 (2023).

Question 2: Frank and his daughter, Joan, own and operate a gravel pit. Frank is age 55 and hopes to retire when he reaches age 65. Joan is age 33 and plans to continue operating the business after Frank retires. Currently, Frank owns 70% of the corporation and Joan owns the remaining 30%. Frank's current income from the corporation is $100,000. They have established a target benefit plan; Frank's account has been earning 8%, and the balance is currently $67,590. Based upon an analysis of Frank's cash flow, you and he have determined that he will need annual retirement income of $75,000 in today's dollars. With this information, which of the following best describes how the target benefit plan will provide for Frank's and Joan's retirement?

I. Considering Joan's age, a money purchase plan would be more beneficial to her.

II. Based upon the present investment return, the target benefit plan may provide Frank with less than 40% of the income that he will need at retirement.

III. Frank can anticipate that the age-weighted nature of the target benefit plan will provide the bulk of his needed retirement income,

IV. For Frank, a target benefit plan will not provide adequate retirement income for him to meet his retirement income objective because of the 25% limit on deductions for employer contributions; additional methods of saving for retirement need to be explored

a.I, II, and IV.

b.I, III, and IV.

c.I and III.

d.II only.