Enmgy E-00059-15-o Series1 Ethics - 1 Cpe Hour For A Score Of At Least 70%

1. Rev Proc 2005-66 on timing of amendments indicates that certain plan features can be implemented during a plan year as long as the employer adopts a formal amendment to add the features as Plan provisions no later than the last day of the Plan Year.

True

False

The explanation for the given correct answer is that according to Rev Proc 2005-66, certain plan features can be added during a plan year as long as a formal amendment is adopted by the employer before the last day of the plan year. This means that the employer has the flexibility to make changes to the plan during the year without having to wait until the next plan year to implement them. Therefore, the statement is true.

Explanation

The explanation for the given correct answer is that according to Rev Proc 2005-66, certain plan features can be added during a plan year as long as a formal amendment is adopted by the employer before the last day of the plan year. This means that the employer has the flexibility to make changes to the plan during the year without having to wait until the next plan year to implement them. Therefore, the statement is true.

2. Rev. Proc. 2005-66 has been interpreted to mean that testing elections cannot be amended after the last day of the Plan Year as far as the top-paid group election for the HCE determination or the Current Year vs. Prior Year testing methods for the ADP and ACP Testing

True

False

Rev. Proc. 2005-66 is a revenue procedure issued by the Internal Revenue Service (IRS) that provides guidance on various aspects of retirement plans. It has been interpreted to mean that testing elections, specifically the top-paid group election for determining highly compensated employees (HCEs) and the Current Year vs. Prior Year testing methods for the Actual Deferral Percentage (ADP) and Actual Contribution Percentage (ACP) tests, cannot be amended after the last day of the Plan Year. Therefore, the statement "Rev. Proc. 2005-66 has been interpreted to mean that testing elections cannot be amended after the last day of the Plan Year as far as the top-paid group election for the HCE determination or the Current Year vs. Prior Year testing methods for the ADP and ACP Testing" is true.

Explanation

Rev. Proc. 2005-66 is a revenue procedure issued by the Internal Revenue Service (IRS) that provides guidance on various aspects of retirement plans. It has been interpreted to mean that testing elections, specifically the top-paid group election for determining highly compensated employees (HCEs) and the Current Year vs. Prior Year testing methods for the Actual Deferral Percentage (ADP) and Actual Contribution Percentage (ACP) tests, cannot be amended after the last day of the Plan Year. Therefore, the statement "Rev. Proc. 2005-66 has been interpreted to mean that testing elections cannot be amended after the last day of the Plan Year as far as the top-paid group election for the HCE determination or the Current Year vs. Prior Year testing methods for the ADP and ACP Testing" is true.

3. Retroactive amendments adopted after a plan year end are generally not permitted for defined contribution plans with there being just a few exceptions; two of these exceptions are 11(g) corrective amendments to fix failures of 410(b) or 401(a)(4} nondiscrimination testing

True

False

Retroactive amendments are typically not allowed for defined contribution plans after the end of a plan year. However, there are a few exceptions to this rule. One of these exceptions is the 11(g) corrective amendment, which is used to correct failures in nondiscrimination testing for sections 410(b) or 401(a)(4) of the plan. Therefore, it is true that 11(g) corrective amendments can be made retroactively for these specific testing failures.

Explanation

Retroactive amendments are typically not allowed for defined contribution plans after the end of a plan year. However, there are a few exceptions to this rule. One of these exceptions is the 11(g) corrective amendment, which is used to correct failures in nondiscrimination testing for sections 410(b) or 401(a)(4) of the plan. Therefore, it is true that 11(g) corrective amendments can be made retroactively for these specific testing failures.

4. IRS regulations under 411(d)(6) provide a caveat to exclude hardship distributions from being treated as protected benefits and, therefore, a Plan can be amended to eliminate hardship distribution provisions.

True

False

IRS regulations under 411(d)(6) do provide a caveat to exclude hardship distributions from being treated as protected benefits. This means that a plan can be amended to eliminate hardship distribution provisions without violating the regulations. Therefore, the statement is true.

Explanation

IRS regulations under 411(d)(6) do provide a caveat to exclude hardship distributions from being treated as protected benefits. This means that a plan can be amended to eliminate hardship distribution provisions without violating the regulations. Therefore, the statement is true.

5. The IRS prohibition on mid-year amendments to a Safe Harbor 401(k) Plan is still an issue but there is some hope that Congressional action may change this.

True

False

The statement suggests that the IRS prohibition on mid-year amendments to a Safe Harbor 401(k) Plan is still a concern. However, there is some optimism that Congressional action might bring about a change in this matter. Therefore, the answer "True" indicates that the statement is correct and there is hope for a potential alteration in the IRS prohibition.

Explanation

The statement suggests that the IRS prohibition on mid-year amendments to a Safe Harbor 401(k) Plan is still a concern. However, there is some optimism that Congressional action might bring about a change in this matter. Therefore, the answer "True" indicates that the statement is correct and there is hope for a potential alteration in the IRS prohibition.

6. IRS regulations under 411(d)(6) added in-service distributions to the definition of optional forms of benefit and, in the final analysis, made in-service distribution provisions protected benefits that cannot be eliminated with respect to benefits that have already accrued.

True

False

The statement is true. IRS regulations under 411(d)(6) did indeed add in-service distributions to the definition of optional forms of benefit. This means that employees are allowed to receive distributions from their retirement plans while still employed. Additionally, these regulations made in-service distribution provisions protected benefits, meaning that they cannot be eliminated with respect to benefits that have already accrued. Therefore, the statement is correct.

Explanation

The statement is true. IRS regulations under 411(d)(6) did indeed add in-service distributions to the definition of optional forms of benefit. This means that employees are allowed to receive distributions from their retirement plans while still employed. Additionally, these regulations made in-service distribution provisions protected benefits, meaning that they cannot be eliminated with respect to benefits that have already accrued. Therefore, the statement is correct.

7. IRS Notice 2014-74 provided minor updates to the content of the safe harbor 402(f) tax/rollover notices effective as of January 1, 2015.

True

False

IRS Notice 2014-74 made small changes to the safe harbor 402(f) tax/rollover notices, which became effective on January 1, 2015. This means that the statement is correct, as the notice did indeed provide updates to the content of the notices.

Explanation

IRS Notice 2014-74 made small changes to the safe harbor 402(f) tax/rollover notices, which became effective on January 1, 2015. This means that the statement is correct, as the notice did indeed provide updates to the content of the notices.

8. A reformative amendment is a retroactive amendment that can be done under EPCRS to correlate a Plan document with the way plan operations have been handled, but the parameters for a reformative amendment require that the amendment primarily benefits nonhighly compensated employees and there must be a submission of the amendment under either VCP or the 5300/5307 determination letter application process.

True

False

A reformative amendment is a type of amendment that can be made retroactively under EPCRS (Employee Plans Compliance Resolution System). It is used to align the plan document with the actual operations of the plan. However, there are certain parameters for a reformative amendment. It must primarily benefit nonhighly compensated employees, and the amendment must be submitted under either the VCP (Voluntary Correction Program) or the 5300/5307 determination letter application process. Therefore, the statement that the given answer is true is correct.

Explanation

A reformative amendment is a type of amendment that can be made retroactively under EPCRS (Employee Plans Compliance Resolution System). It is used to align the plan document with the actual operations of the plan. However, there are certain parameters for a reformative amendment. It must primarily benefit nonhighly compensated employees, and the amendment must be submitted under either the VCP (Voluntary Correction Program) or the 5300/5307 determination letter application process. Therefore, the statement that the given answer is true is correct.

9. The IRC 412(d)(2) amendment rule for defined benefit pension plan sponsors to be able to adopt liberalizing plan amendments within the 2-1/2 month period following each plan year and make the effective date of such amendments retroactive to the first day of the prior plan year does not have any application whatsoever to defined contribution plan sponsors and, therefore, defined contribution plan sponsors cannot make retroactive amendments using this 2-1/2 month timing parameter.

True

False

The IRC 412(d)(2) amendment rule allows defined benefit pension plan sponsors to make retroactive amendments within 2-1/2 months after each plan year. This rule does not apply to defined contribution plan sponsors, so they cannot make retroactive amendments within this timeframe. Therefore, the statement that defined contribution plan sponsors cannot make retroactive amendments using this 2-1/2 month timing parameter is true.

Explanation

The IRC 412(d)(2) amendment rule allows defined benefit pension plan sponsors to make retroactive amendments within 2-1/2 months after each plan year. This rule does not apply to defined contribution plan sponsors, so they cannot make retroactive amendments within this timeframe. Therefore, the statement that defined contribution plan sponsors cannot make retroactive amendments using this 2-1/2 month timing parameter is true.

10. The guidance released by IRS regarding In-Plan Roth Conversions or Rollovers indicate that a 402(f) tax/rollover notice is not required for participants who opt to take advantage of an In-Plan rollover because monies are not actually distributed from the Plan to the participant.

True

False

The guidance released by the IRS states that a 402(f) tax/rollover notice is not required for participants who choose to do an In-Plan rollover. This is because in an In-Plan rollover, the money is not actually distributed from the Plan to the participant. Therefore, the statement is true.

Explanation

The guidance released by the IRS states that a 402(f) tax/rollover notice is not required for participants who choose to do an In-Plan rollover. This is because in an In-Plan rollover, the money is not actually distributed from the Plan to the participant. Therefore, the statement is true.