Preview Questions Employee Benefits Lawyer | Role Specific Skill

Question 1: How does the "cash balance" plan impact taxation compared to a traditional pension plan?

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Contributions to a cash balance plan are treated as tax-deferred income, and the balance grows based on interest credits

Contributions to a cash balance plan are subject to an additional excise tax

A cash balance plan offers tax-free benefits upon retirement, with no taxation at the time of withdrawal

Contributions to a cash balance plan are immediately taxed as income to the employee

Question 2: Under ERISA, what are the requirements for a "qualified pension plan"?

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It must meet certain funding, vesting, and participation standards, among others, to receive tax benefits

It must provide benefits to employees based on years of service only

It must guarantee full retirement benefits for all employees, regardless of contributions

It must have a minimum return rate for plan assets to avoid penalties

Question 3: How does "health insurance premium tax credit" work under the ACA?

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It provides tax-free health insurance premiums for employers to pay directly to employees

It is a one-time tax credit available only to individuals with employer-sponsored coverage

It helps eligible individuals reduce the cost of their health insurance premiums based on income, family size, and other factors

It guarantees a fixed tax refund regardless of income level or plan cost

Question 4: Under ERISA, how does the "plan asset rule" impact fiduciary duties for employee benefit plans?

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It prevents fiduciaries from making investments outside of the plan's administrative budget

It mandates that plan assets be treated as employer assets until benefits are paid out

It requires fiduciaries to ensure that plan assets are used exclusively for the benefit of participants and beneficiaries

It allows fiduciaries to invest plan assets in a way that benefits the employer's interests

Question 5: What are the tax advantages of using a Health Savings Account (HSA) in an employer-sponsored health plan?

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HSAs are not recognized under tax laws, making them ineligible for tax advantages

HSA contributions are taxed, but withdrawals for medical expenses are tax-free

Contributions to an HSA are tax-deductible, and withdrawals for qualified medical expenses are tax-free

HSA contributions are taxable, but withdrawals for non-medical expenses are tax-free

Question 6: How does the "anti-cutback" rule under ERISA protect pension plan participants?

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It requires pension plans to pay out benefits upon request

It allows employers to adjust plan terms without participant consent

It prevents the reduction of accrued benefits in a pension plan

It limits the amount of employer contributions to the pension plan