Pcc Exam Week 3

34 Questions | Total Attempts: 87

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Pcc Exam Week 3

Exam 3 will test your knowledge over information taught during week 1, 2, and 3 of new hire training. This exam is open book. Please feel free to use your notes and all other available resources to complete the exam. However, CSRs should not discuss questions or answers with on another.


Questions and Answers
  • 1. 
    Catch up contributions for Small Market plans can be matched.
    • A. 

      True

    • B. 

      False

  • 2. 
    Checks mailed to residences outside of the United States will require a mandatory withholding of 40% for federal income tax.
    • A. 

      True

    • B. 

      False

  • 3. 
    A participant (lives in CA, age 45, no longer employed, vested balance is $10,000) that terminated their retirement account as a lump sum will require 20% withheld for federal tax , ___ for state tax, and may be subject to pay an IRS early withdrawal penalty.
    • A. 

      10% of the federal withholding amount = $200

    • B. 

      20% of the federal withholding amount = $400

    • C. 

      1% of the distribution amount = $100

    • D. 

      5% of the distribution amount = $500

  • 4. 
    Distributions that require ADP Approval will be approved ____
    • A. 

      Once the Plan Administrator approves the request

    • B. 

      Within 30 business days

    • C. 

      Within 15 business days

    • D. 

      Within 2-3 business days

  • 5. 
    Straight through processing means the distribution will be processed within 3-5 business days after the PA approves the request. 
    • A. 

      True

    • B. 

      False

  • 6. 
    To determine who approves in-service withdrawal requests, CSRs can check PES screen KC04 "Web Features".
    • A. 

      True

    • B. 

      False

  • 7. 
    Participants can request for ADP to reverse a lump sum distribution check we processed into a rollover check to another financial institution and vice versa.  This is called a Change of Mind transaction.
    • A. 

      True

    • B. 

      False

  • 8. 
    Beneficiaries that inherit an account and distribute it as a lump sum payout are required to have  ____ withheld for federal taxes.
    • A. 

      Optional

    • B. 

      20%

    • C. 

      10%

    • D. 

      15%

  • 9. 
    This type of withdrawal becomes available if the participant rolls over assets from another financial institution into an ADP retirement account. This withdrawal will also only show and be available if the plan allows this type of withdrawal. 
    • A. 

      Hardship

    • B. 

      After-tax Withdrawal

    • C. 

      Rollover Withdrawal

    • D. 

      Age Based Withdrawal

  • 10. 
    The state tax withholding for the state of Vermont is 27% of the federal withholding amount.
    • A. 

      True

    • B. 

      False

  • 11. 
    After a participant terminates their retirement plan, they will have access to the participant website for ____ before their access gets deactivated.
    • A. 

      6 months

    • B. 

      3 months

    • C. 

      30 days

    • D. 

      1 year

  • 12. 
    If a participant terminated employment at age 40 but waits to terminate and distribute their account until age 70, they will not have to pay the early withdrawal penalty.
    • A. 

      True

    • B. 

      False

  • 13. 
    CSRs are required to read the ______ with all online withdrawal and termination requests.(Choose the most applicable option)
    • A. 

      IRS Special Tax Notice Waiver

    • B. 

      Fee Disclosure Script

    • C. 

      American Century Rollover Script

    • D. 

      Fee Disclosure Document

  • 14. 
    For most plans, all of the following are online distribution options EXCEPT____
    • A. 

      Lump Sum DIstribution

    • B. 

      Direct Transfer

    • C. 

      Lump Sum and Direct Transfer

    • D. 

      Installments

  • 15. 
    During after-tax in-service distributions, _______ money is pulled from both the employee after-tax contribution and its earnings. This means distribution requests cannot consist of employee after-tax money principal alone in order to avoid paying taxes on the distribution amount. 
    • A. 

      Post 86

    • B. 

      Pre 86

    • C. 

      Post 87

    • D. 

      Pre 87

  • 16. 
    If a terminated plan participant calls to withdrawal funds from their retirement account, CSRs should discuss all in-service withdrawal, hardship, and loan options.
    • A. 

      True

    • B. 

      False

  • 17. 
    A Small Market participant can take a final distribution and rollover to 3 separate rollover institutions. 
    • A. 

      True

    • B. 

      False

  • 18. 
    The 401(k) plan allows for hardship withdrawals of elective contribution accounts for the allowable safe harbor reasons.  Which of the following participants are eligible for a hardship? 
    • A. 

      Frederick is buying a vacation home (actively employed)

    • B. 

      Jeanne is paying for her son’s college tuition (actively employed)

    • C. 

      Michael needs to pay for his wife’s funeral expenses (not actively employed)

    • D. 

      Jeremy is needing to pay for the security deposit on his new apartment (actively employed)

  • 19. 
    Janie (age 26) was part of a recent layoff at the manufacturing facility. When she takes a distribution of her 401(k) balance it will be which type of distribution?
    • A. 

      Death

    • B. 

      Disability

    • C. 

      Separation from Service

    • D. 

      Retirement

  • 20. 
    Jerry recently retired from his job as a sales manager. He is reviewing the distribution packet he received regarding his 401(k) plan. He is reading about how a lump sum distribution is taxed, how a rollover distribution is not taxed and information regarding federal tax withholding. Which notice or consent is Jerry reviewing?
    • A. 

      Notice of Distribution Options

    • B. 

      Special Tax Notice

    • C. 

      Distribution Form

    • D. 

      J&S Spousal Consent Distribution Form

  • 21. 
    Ella just quit her job to go back to graduate school. She is 28 and unmarried. She has a balance in the 401(k) plan. During her exit interview, the HR Director gave her a distribution packet to review. Which notices and consents are included in her packet? (Select 2 that apply)
    • A. 

      Distribution Form

    • B. 

      Form 1099-R

    • C. 

      Special Tax Notice

    • D. 

      Salary deferral Election Form

  • 22. 
    Dominic is age 35 and recently resigned his position as a toy store manager. He elects to take a lump sum distribution from his 401(k) plan. His vested balance is $28,000. Which of the following statements describe Dominic’s situation? (Select 3 that apply)
    • A. 

      The distribution will automatically be paid out unless he returns the distribution form within 30 days of his resignation.

    • B. 

      The distribution could be subject to an additional 10% excise tax.

    • C. 

      The distribution is subject to mandatory 20% federal tax withholding.

    • D. 

      He will receive a Form 1099-R to report the distribution when he files his taxes the following year.

  • 23. 
    Angela is age 42 and recently received a hardship withdrawal from her 401(k) plan. Her withdrawal totaled $10,000. Which of the following statements describe Angela’s situation? (Select 3 that apply)
    • A. 

      The withdrawal is eligible for rollover as long as she does it within 60 days of receiving her check.

    • B. 

      She will be suspended from making deferral elections for 6 months following the withdrawal.

    • C. 

      She will receive a Form 1099-R to report the withdrawal when she files her taxes.

    • D. 

      The withdrawal could be subject to an additional 10% excise tax.

  • 24. 
    Tanya terminated employment last year and is 80% vested on all employer contributions.  Her before-tax contribution amount is $4,200.00.Her employer match is $2,750.00.Her employer NEC is $500.00.What is her distribution amount before taxes and fees?
    • A. 

      $5,960.00

    • B. 

      $6,060.00

    • C. 

      $6,800.00

    • D. 

      $7,450.00

  • 25. 
    Doreen lost her savings investing in a business venture with a friend. She has several large expenses and she is thinking about taking a withdrawal from her 401(k) plan. Which of these situations qualify as a safe harbor hardship withdrawal? (Select 3 that apply)
    • A. 

      Prevent foreclosure on her vacation home.

    • B. 

      Expenses to repair her roof from a tree that fell on her house.

    • C. 

      Medical expenses for her recent liver transplant.

    • D. 

      Room and board for her son’s next year at college.

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