Practice Quiz

Financial Planner

Category - Retirement Savings and Income Planning

Start a Study Session Sign up for Question of the Day
Mike owns a motorcycle shop and wants to add a benefit plan for his employees. He has heard about age-weighted plans and thinks this may be the best plan. What should Mike know about age-weighted plans?
  1. They must be combined with a qualified retirement plan.
  2. They are exempt from non-discrimination testing.
  3. Employer contributions must be “substantial and recurring.”
  4. These plans are tested under cross-testing rules.
Explanation
Answer: D - Employers considering age-weighted plans should know that these plans are tested under cross-testing rules to satisfy non-discrimination requirements. This type of profit sharing plan uses age and compensation to allocate contributes to participants. The plan benefits older employees
Was this helpful? Upvote!
Login to contribute your own answer or details
Start a Study Session Sign up for Question of the Day

Top questions

Related questions

Most popular on PracticeQuiz