Qualified 401(k) Administrator (QKA) 1 Practice Exam

These questions are part of the practice quiz. Start practicing

• Can ADP safe harbor contributions be distributed at age 59.5 for any reason?
• When does a forfeiture occur in a defunded contribution plan?
• What happens if one fails to take an RMD?
• Which option best describes the default behavior of automatic escalation?
• What happens if an employee opts out of automatic escalation?
• What age is typically associated with starting mandatory distributions from a 401(k) plan?
• What is the purpose of automatic enrollment in a 401(k) plan?
• What happens to employer contributions if an employee leaves before being fully vested?
• What is the equivalency method for determining eligibility?
• What happens if an employee's contributions exceed the allowed limits?
• In a 401(k) plan, what does "top-heavy" mean?
• What are Qualified Default Investment Alternatives (QDIAs)?
• What are "eligibility requirements" in 401(k) plans?
• Is it true that a rate of replacement loan is used when refinancing a participant loan?
• Which scenario is least likely to benefit from automatic escalation?
• What is a deemed distribution in retirement plans?
• For employees reaching their normal retirement age, what information must be communicated about taxation?
• What is the purpose of nondiscrimination testing in 401(k) plans?
• What typically happens to unclaimed 401(k) funds?
• Which methods can be used to calculate eligibility for plans?
• Do money purchase plans require employer contributions?
• Why might employers decide to implement a matching contribution formula?
• When must a new plan be established to meet the requirements for contributions?
• What type of contributions are taken from net income after taxes?
• What does "cost basis" represent in relation to 401(k) investments?
• What kind of contributions can be transferred in a rollover?
• What is a requirement of the ACP safe harbor?
• What does the Employee Deferral Contribution refer to?
• Under what condition is a profit sharing plan exempt from QSJA rules?
• How are safe harbor provisions communicated to participants?
• Are 403(b) retirement plans required to undergo ADP testing?
• What is a common feature of both matching contribution formulas and automatic escalation?
• How can participants typically access their 401(k) account information?
• What does QACA represent in retirement plan terminology?
• What is a required use of forfeitures in a qualified plan?
• What is one restriction of pension plans regarding distributions?
• Which factor should be considered when determining eligibility for plan participation during the computation periods?
• What is the default consequence of not opting out of automatic enrollment in a 401(k) plan?
• What does the "Employer Match" refer to in 401(k) plans?
• How does market volatility affect 401(k) plans?
• What does "age discrimination" refer to in 401(k) plans?
• What are "hardship withdrawals" in a 401(k) plan?
• How can matching contribution formulas affect employee participation in a retirement plan?
• What is the penalty tax for not taking a required minimum distribution (RMD)?
• How is retirement age defined for 401(k) plans?
• What does "plan termination" refer to in a 401(k) context?
• What is the limit for annual additions in 2022?
• How is a profit-sharing plan defined in the context of a 401(k)?
• What is the function of a plan amendment in a 401(k) plan?
• In what scenario can automatic escalation be particularly valuable?
• What is the impact of tax-deferred contributions on a traditional 401(k)?
• Which maximum contribution limit is applied to annual additions?
• What are rollover contributions in the context of 401(k) plans?
• What must organizations do regarding discretionary contributions in cross testing?
• What is one potential benefit of implementing automatic escalation for employees?
• Which factor could disqualify a profit-sharing plan from being exempt from QSJA rules?
• What does automatic escalation in retirement savings plans entail?
• What is a Summary Annual Report (SAR)?
• What is a "safe harbor" provision in a 401(k) plan?
• What are the typical investment options available in a 401(k) plan?
• Can a single sum death benefit be rolled over into another retirement plan?
• Are hardship distributions eligible for rollover?
• What role do employers play in matching contribution formulas?
• What does a vesting schedule indicate in a retirement plan?
• What is a primary concern of market volatility for 401(k) participants?
• What is the primary purpose of a 401(k) plan audit?
• What is not included in annual additions?
• What is a notable characteristic of safe harbor plans?
• What is the primary purpose of a 401(k) plan?
• What advantage does a 401(k) plan offer to employees during retirement?
• How does ERISA protect participants in retirement plans?
• What defines the "Annual Contribution Limitation" for a 401(k) plan?
• What is the correct formula for determining the maximum loan amount a participant may receive for a defined contribution (DC) plan?
• Which formula is used to calculate the maximum allowable loan from a retirement account?
• What is the main reason unions adopt money purchase plans?
• Which of the following is NOT a requirement for an employee to be eligible for 401(k) plan contributions?
• Which of the following qualifies as a 401(k) distribution?
• Do 403(b) plans require coverage testing?
• What is the primary employment requirement for eligibility regarding elapsed time?
• In what scenario can you amend a safe harbor provision?
• What contributions are included in annual additions for a 401(k) plan?
• What happens if a participant meets eligibility rules but opts out when terminated?
• What is a critical aspect of fulfilling fiduciary duties in a 401(k) plan?
• How is forfeiture calculated from an employee account?
• What are investment options in a 401(k) plan?
• Who benefits from an audit of a 401(k) plan?
• What can an employee expect if they withdraw from their 401(k) plan before reaching the age of 59½?
• What is the requirement for amending a plan when using matching safe harbor contributions?
• What constitutes a "prohibited transaction" in a 401(k) plan?
• Can a beneficiary be added to an annuity?
• What is the significance of understanding the cost basis for 401(k) investments?
• Do all retirement plans allow for rollovers?
• What is a key feature of a SEP-IRA?
• What type of withdrawal is specifically prohibited from being rolled over?
• Are annuity distributions the same as installment distributions?
• What is the formula for calculating safe harbor contribution, and what is the maximum salary considered?
• Which type of contribution must be made to comply with a traditional ADP safe harbor?
• In the context of retirement plans, what does RMD stand for?
• Can a DRO include benefits that are not provided by the plan?
• What occurs when a distribution is made to a participant who has retired early at age 50?
• When is a domestic relations order considered a QDRO?
• How does a participant's rehire impact their eligibility to enter a retirement plan if they opted out upon termination?
• What is a 403(b) plan?
• What is the deadline for the first Required Minimum Distribution (RMD) for non-5% owners?
• How can employers limit their involvement in a 403(b) plan?
• What is the taxation status of a pre-tax contribution at the moment of withdrawal?
• In a safe harbor plan, can provisions be provided only to NHCEs?
• What is the maximum disparity percentage in a design-based allocation method using permitted disparity at an integration level of 100% of TWB?
• What does the annual report on Form 5500 typically include?
• Which entity is primarily responsible for the jurisdiction of pension plan rights?
• What is the primary function of matching contribution formulas in a 401(k) plan?
• What is a cliff vesting schedule typically characterized by?
• In what way can age discrimination be assessed in a 401(k) plan?
• What does EACA stand for in the context of retirement plans?
• What does ERISA primarily cover?
• What is necessary each year for cross testing allocation systems?
• What does the summary plan description (SPD) provide for participants in a 401(k) plan?
• When must participants be notified if using a safe harbor plan?
• What is the primary responsibility of a fiduciary in a 401(k) plan?
• Under what condition can a 403(b) plan be exempt from ERISA?
• Which of the following is a main contribution type allowed in a 401(k) plan?
• A participant who retires early at age 50 and takes a distribution will incur an additional tax. What is the percentage of this additional tax?
• What does the time value of money refer to?
• What role does a third-party administrator (TPA) play in 401(k) plans?
• What are pre-tax deferrals?
• Why is it important for plans to include eligible employees in 401(k) plans?
• What does the acronym DRO stand for in relation to qualified plans?
• In terms of employer contributions, how should forfeitures be utilized?
• What factors influence the amount of tax withholding from a retirement distribution?
• When can a safe harbor contribution be reduced or suspended?
• Are cross-testing allocations designed based on safe harbor methods?
• What is the "401(k) loan feature"?
• Who primarily regulates 401(k) plans?
• What characteristic is specifically associated with pension plans?
• How are employees grouped for cross testing allocation methods?
• When is an employee's account considered to be fully vested?
• What defines a 'qualified distribution' from a 401(k) plan?
• Automatic escalation is most effective for addressing what challenge in retirement plans?
• What are the consequences of failing nondiscrimination testing?
• What does "vesting" mean in the context of 401(k) plans?
• What is the significance of participant education in 401(k) plans?
• What is the requirement for a traditional ADP safe harbor matching contribution based on deferrals?
• How are after-tax contributions characterized?
• What type of notice must be sent to a participant at normal retirement age explaining taxation rules before a distribution?
• What role do key employees play in a top-heavy 401(k) plan?
• What is the vesting requirement for a 3-year cliff plan?
• Which of the following is true about qualified retirement plans?
• What is typically applicable to early withdrawals from a 401(k) plan?
• Which of the following is NOT a characteristic of a 403(b) plan?
• What is the function of IRS Form 5500?
• How are contributions to a 401(k) plan typically made?
• What is a requirement for introducing a matching safe harbor contribution during the initial year?
• What type of IRA is considered a simplified and less expensive option for self-employed individuals?
• Why are educational opportunities important for 401(k) participants?
• What is the role of the plan sponsor in a 401(k) plan?
• When can a safe harbor non-elective contribution be added to a plan?
• What is the maximum allowable amount for a loan taken against a vested balance?
• What is a potential disadvantage of matching contribution formulas?
• If a plan satisfies the ADP contribution requirements, does it also satisfy the QACA?
• Which of the following is a benefit of a SEP plan for employers?
• When can you add a matching safe harbor contribution to an existing profit-sharing plan for the current year?
• What is a key feature of the tax withholding amount from a distribution?
• What may be a direct outcome of implementing matching contributions in a 401(k) plan?
• Why is compliance with IRS regulations important for a 401(k) plan?
• How is permitted disparity calculated?
• What is the purpose of "mandated notices" in a 401(k) plan?
• What are mandatory distributions in a 401(k) plan?
• What is the benefit of employer matching contributions in a 401(k) plan?
• What is the maximum contribution limit for employee salary deferrals for 401(k) plans in 2023?
• How do traditional 401(k) plans differ from Roth 401(k) plans?
• What happens to contributions if an employee leaves the company?
• What are "catch-up contributions" in a 401(k) plan?
• What defines a 403(b) retirement plan?
• What is the primary consideration when calculating forfeiture attributed to a participant?
• In regard to a Qualified Domestic Relations Order (QDRO), a plan can still provide for payment even if what condition holds?
• What does the acronym ERISA stand for?
• Which of the following describes how automatic escalation is implemented?
• What defines an "eligible employee" in a 401(k) plan?
• What is the timeframe within which compensation must be paid to a terminated employee?
• What does IRS Code Section 401(k) primarily outline?
• Why is alleviating fiduciary liability important in a 401(k) plan?
• Do SEP plans need to file Form 5500?
• What is a significant tax advantage of traditional 401(k) plans?
• Can hardships, RMDs, or qualified birth and adoption withdrawals be rolled over into another account?
• Which sources are always fully vested in retirement plans?
• When must the Form 1099-R be distributed by?
• What does Title II of ERISA pertain to?