All of the Following Statements About Section 401(k)plans Are Correct

question 27

Multiple Choice

All of the following statements about Section 401(k) plans are correct EXCEPT

• A)Elective salary deferrals to these plans are free of federal income taxation until the funds are actually withdrawn.
• B)These plans are subject to rules that prevent discrimination in favor of highly compensated employees.
• C)There is no limit on the actual percentage of salary that can be deferred by highly compensated employees under a qualified plan.
• D)Most plans allow employees to determine how funds are invested.

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