Preview Questions Employee Benefits Lawyer | Role Specific Skill

Question 1: What is the "contribution allocation" in defined contribution plans, and how should an Employee Benefits Lawyer advise clients on plan design to optimize employee benefits?

Which action should you take?

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Allocation only applies to employer contributions, not employee contributions

Contribution allocation is automatically determined by employee tenure

Contribution allocation is irrelevant in defined contribution plans

Contribution allocation refers to how contributions are divided among participants based on plan rules; the lawyer should ensure that the allocation is fair and follows the plan's terms

Question 2: How do "catch-up contributions" function in 401(k) plans for participants over the age of 50?

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They are only available for defined benefit plans, not 401(k) plans

They allow participants over 50 to contribute additional funds beyond the regular limit to help accelerate retirement savings

They require participants to stop contributing once they reach 50

They reduce the maximum allowable contribution for employees over 50

Question 3: Under ERISA, what is the "vesting" requirement, and how does it affect retirement benefits?

Which action should you take?

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Vesting refers to the process by which an employee earns the right to keep employer contributions to their retirement plan

Vesting mandates that all employer contributions be returned to the employer if the employee leaves

Vesting is a condition that employees must meet before becoming eligible for health benefits

Vesting determines the amount of benefits an employee will receive upon termination of employment

Question 4: Under IRC Section 402(g), what is the maximum contribution limit to a 401(k) plan for employees under 50 years old in 2023?

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$18,000

$25,000

$22,500

$19,000

Question 5: Under ERISA, what is the primary difference between a defined benefit plan and a defined contribution plan?

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A defined benefit plan is funded only by the employer, while a defined contribution plan is funded by employee contributions only

A defined contribution plan guarantees a fixed retirement amount, while a defined benefit plan's benefits depend on investment performance

A defined benefit plan promises a specified benefit upon retirement, while a defined contribution plan is based on contributions made by the employer and/or employee

A defined benefit plan requires employees to manage their own investments, while a defined contribution plan is managed by the employer

Question 6: How does the "pension protection act of 2006" affect pension plan funding requirements?

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It allows pension funds to reduce contributions in certain economic conditions

It sets stricter funding requirements for defined benefit pension plans to ensure they are adequately funded

It provides tax breaks for employers who fail to meet pension funding requirements

It limits the amount of employer contributions to pension plans