What impact would the retirement of a highly compensated employee have on a money-purchase pension plan...

What impact would the retirement of a highly compensated employee have on a money-purchase pension plan assuming that the replacement employee is offered a significantly lower wage?

Group of answer choices

No effect

Decrease employer contributions

Increase employer contributions

Expert Solution

Decrease employer contributions

the above is answer

because of lower wage contributions will decline

jeff jeffy answered 2 years ago

Question 1 In a defined contribution pension plan, the retirement benefits to the employee are not...

Question 1 In a defined contribution pension plan, the retirement benefits to the employee are not defined. True or False Question 2 Saved Employees are not allowed to make contributions to a defined contribution pension plan. True or False Question 3 Current service cost is usually the largest single component of pension expense under a defined benefit pension plan. True or False Question 4 In a defined contribution plan, employers run the risk of high pension contributions. True or False...

Discuss the eligibility and coverage, including the definition of “highly compensated” for employee benefit purposes of...

Discuss the eligibility and coverage, including the definition of “highly compensated” for employee benefit purposes of a qualified plan

What could cause an employee to have an over-contribution to the Canada Pension Plan or Employment...

What could cause an employee to have an over-contribution to the Canada Pension Plan or Employment Insurance?

Which of the following statements best describes the advantages of a qualified money-purchase pension plan? (A)...

Which of the following statements best describes the advantages of a qualified money-purchase pension plan? (A) It is designed to adequately protect against inflation. (B) Older employees can be more readily provided with adequate retirement benefits. (C) Tax sheltering is enhanced because an annuity can be purchased for each employee. (D) Costs are predictable, and the design is simple and understandable.

Retirement Plans A defined benefit plan, most often known as a pension, is a retirement account...

Retirement Plans A defined benefit plan, most often known as a pension, is a retirement account for which your employer ponies up all the money and promises you a set payout when you retire. A defined contribution plan, like a 401(k) or 403(b), requires you to put in your own money. Annuity: An annuity is a contract between you and an insurance company in which you make a lump sum payment or series of payments and in return obtain regular...

If you had your choice, would you prefer to purchase a Defined Contribution Pension Plan or...

If you had your choice, would you prefer to purchase a Defined Contribution Pension Plan or a Defined Benefit Pension Plan? Is one better than the other? Explain your answer

MedPlus Ltd. initiated a one-person pension plan in January 2012 that promises the employee a pension...

MedPlus Ltd. initiated a one-person pension plan in January 2012 that promises the employee a pension on retirement according to the following formula: pension benefit = 2.5% of final salary per year of service after the plan initiation. The employee began employment with MedPlus early in 2009 at age 33, and expects to retire at the end of 2035, the year in which he turns 60. His life expectancy at that time is 21 years. Assume that this employee earned...

ABC Ltd initiated a one-person pension plan in January 2012 that promises the employee a pension...

ABC Ltd initiated a one-person pension plan in January 2012 that promises the employee a pension on retirement according to the following formula: pension benefit = 2.5% of final salary per year of service after the plan initiation. The employee began employment with ABC Ltd early in 2009 at age 33, and expects to retire at the end of 2035, the year in which he turns 60. His life expectancy at that time is 21 years. Assume that this employee...

Hello, this is a TAX question regarding deferred compensation. What is a highly compensated person under...

Hello, this is a TAX question regarding deferred compensation. What is a highly compensated person under ERISA (the qualified deferred compensation rules)? Why is that definition significant and how is it applied?

For 2019, Chanda is 36, single, and an active participant in a qualified employee pension plan....

For 2019, Chanda is 36, single, and an active participant in a qualified employee pension plan. Determine the maximum Roth IRA contribution that she can make in each of the following cases: a. Assume that she did not make any contributions to other IRA accounts during the year. When her adjusted gross income for the year is $66,000, Chanda is allowed to contribute $_6,000_ to her Roth IRA. b. When her adjusted gross income for the year is $125,000, Chanda...

Question