Review Questions Module 1
OVERVIEW OF NONQUALIFIED PLANS
A Benefits paid from a deferred compensation plan are tax-free
B Deferred compensation payments to a beneficiary are not subject to estate tax
C Qualified plans are subject to complex nondiscrimination rules
D Earnings on assets held in a qualified plan are not sheltered from current income tax
A. Minimum coverage requirement
B. Non-discrimination requirement
C. Vesting requirement
D. Cost recovery requirement
A. Obtaining compensation for the death of a key executive
B. Attracting key talent
C. Retaining key executives
D. Rewarding high-impact achievers
A. Employer tax-deductibility of plan contributions
B. The ability to tailor a plan to fit the executive’s needs
C. Employer cost recovery
D. The ability to favor one key employee
A. Humanely retiring all of a firm’s employees
B. Attracting a key executive
C. Arranging for business succession
D. Funding an ESOP
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