Which of the following statements regarding determination letters for qualified plans is true?

When a qualified plan is created, the plan sponsor must request a determination letter from the IRS.

An employer who adopts a prototype plan must request a determination letter from the IRS.

If a qualified plan is amended, the plan sponsor must request a determination letter from the Department of Labor.

A qualified plan which receives a favorable determination letter from the IRS may still be disqualified at a later date.

All of the following are acceptable reasons for an employer to terminate a qualified retirement plan except:

The employer is no longer in a financial position to make further plan contributions.

The employer no longer wants to maintain the plan because it must cover other employees other than just himself.

The plan benefits are not meaningful amounts, and participants are limited in their ability to make deductible IRA contributions.

To lower plan costs and ease administrative complexity, the employer wants to switch plan designs.

Perry operates IN-N-Out Pharmacy, a sole proprietorship. In-N-Out sponsors a profit sharing plan. Perry had net income of $205,000 and paid self employment taxes of $30,000 during the year. If Perry makes a 15% of salary contribution on behalf of all of his employees to the profit sharing plan, how much is the contribution to the profit sharing plan on behalf of Perry?

$22,820

$24,776

$26,250

$30,750

Which of the following statements is(are) true?

A SEP requires the plan sponsor to provide at least a 100% match up to 3% of all employee deferrals

A SEP plan can be established by employers who employ more than 100 employees who earn $5,000 or more during the preceding calendar year.

SIMPLEs can be either contributory or noncontributory plans, whereas SEP plans are always noncontributory.

An employer who wants to share the responsibility of retirement plan funding should establish a SIMPLE rather than a SEP.

A. 4 only

B. 2 and 3

C. 1,2, and 4

D.2,3, and 4

Jennifer, age 54, earns $125,000 annually from ABC Incorporated. ABC sponsors a SIMPLE, and matches employee deferrals 100% up to a 3% contribution. Assuming Jennifer defers the maximum to her SIMPLE, what is the total contribution to the account in 2008 including both employee and employer contributions?

$13,750

$14,250

$16,750

$20,000

Which of the following statement(s) regarding 403(b) plans is true?

Assets within a 403(b) plan may be invested in individual securities.

A 403(b) plan usually provides a 3 to 7 year graduated vesting schedule.

A 403(b) plan must pass the ACP test if it is an ERISA plan.

In certain situations, a participant of a 403(b) plan can defer an additional $15,000 as a catch up to the 403(b) plan.

A. 4 only B. 1 and 2

C. 3 and 4

D.2, 3, and 4