A money purchase pension plan must provide the participant with a notice that explains the circumstances under which a QPSA will be paid.
Distribution notice and consent requirements depend on whether the QJSA rule applies to the participant and the value of the vested account balance.
A plan that has a NRA earlier then age 62 must provide a notice regarding the right to delay distribution until the participant reaches age 62.
The only notice requirement for an involuntary distribution is the rollover notice.
Distribution notice requirements refer to information that must be provided to the participant before distributions may be made.
The $5,000 threshold for the notice and consent requirements is based on the participant’s vested account balance as of the date of distribution.
The rollover notice need not be provided to a participant receiving an eligible rollover distribution of $500 or less.
The beneficiary of a life insurance policy will be taxed on the total distribution from the policy.
A self-employed individual’s contributions for the purchase of life insurance are not deductible by the self-employed individual.
Nonpension plans may use the 100-times rule for determining incidental benefit limits regarding life insurance.
All of the following information must be provided to a participant prior to receiving a distribution due to termination of employment, EXCEPT:
A. Loan procedures
B. Taxation issues
C. Information about how a distribution will be taxed
D. The optional forms of payment available
E. The right to delay payment until NRA
Which notice must be provided to the participant? The plan is a target benefit plan. The participant is age 35 and terminates employment. The participant has a vested account balance of $750. The plan will make involuntary cash out of benefits.
A. Waiver of the QJSA notice
B. Optional forms of benefit notice
C. Right to delay distribution to NRA notice
D. Rollover notice
E. Spouse’s consent rights regarding a waiver of the QJSA
All of the following statements regarding notice requirements are TRUE, EXCEPT:
A. A summary rollover notice may be provided to the participant if the complete rollover notice has previously been provided.
B. A QJSA notice must explain the financial effect of electing an optional form of benefit.
C. A QPSA notice must contain a general description of the QPSA.
D. The special tax notice must contain information regarding any special income tax elections available.
E. A rollover notice must be provided for an eligible rollover distribution of $150.
Which of the following statements regarding life insurance in defined contribution plans is/are TRUE? I. The participant is required to pay taxes on the term cost of the insurance each year. II. Net insurance proceeds paid to the beneficiary are not taxable. III. Incidental life insurance can remain in the plan post-retirement until the participant elects a distribution.
A. I only
B. II only
C. I and II only
D. II and III only
E. I, II and III
Which of the following statements regarding the incidental life insurance benefit limit is/are TRUE? I. The limit for a term life insurance policy is 25% of the aggregate contributions. II. The limit for a whole life insurance policy is less than 50% of the aggregate contributions. III. The limit for universal life insurance policy is less than 50% of the aggregate contributions.
