Adoption Agreements (Small Market)

8 Questions | Total Attempts: 140

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Adoption Agreements (Small Market)

Questions and Answers
  • 1. 
    What is the last day rule?
    • A. 

      None of the Above

    • B. 

      An employee may contribute to the 401K up to their last day of employment

    • C. 

      The employee must be employed on the last day of the plan year to share in the employer contribution

    • D. 

      The employer contribution will be vested on the last day of the year

    • E. 

      The employee need not be employed with the employer at the end of the year to share in the employer contribution

  • 2. 
    A plan can exclude bonus compensation on the standard adoption agreement 002
    • A. 

      True

    • B. 

      False

  • 3. 
    What are some of the options the Non-Standard Adoption Agreements 001 allow that the standard 002 does not?  Check all that apply
    • A. 

      A Last Day Rule

    • B. 

      Cross Testing

    • C. 

      Per Payroll NEC

    • D. 

      Employee and Compensation Exclusions

    • E. 

      Tiered Matching

  • 4. 
    In general, the main difference between a matching contribution and a NEC is that a matching contribution is given to all employees who have met eligibility regardless of participation while a NEC is only given to those that participate in the plan
    • A. 

      True

    • B. 

      False

  • 5. 
    The base plan document we are currently on is 06
    • A. 

      True

    • B. 

      False

  • 6. 
    How often do we have to restate our plan documents with the IRS?
    • A. 

      Every 6 years

    • B. 

      Every 2 years

    • C. 

      Only when we or the IRS make significant changes

    • D. 

      Never

  • 7. 
    If the plan has an IRS plan # of 002, what assumptions may be true? (Choose all that apply)
    • A. 

      They may have another qualified plan out there

    • B. 

      They are probably on their first plan reporting to the IRS

    • C. 

      They may have terminated a prior 401k and started a new one

    • D. 

      All of the above

  • 8. 
    AA 001 is the standard adoption agreement,  002 is the non-standard
    • A. 

      True

    • B. 

      False

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