An Internal Revenue Code Rule That Impacts the Design of Pension

question 54

Multiple Choice

An Internal Revenue Code rule that impacts the design of pension plans is

• A)employee contributions to the pension fund are not taxable until pension benefits are actually received
• B)pension fund earnings are taxable
• C)employer contributions to the pension fund are not taxable to the employee when pension benefits are actually received
• D)all employer pension expenses are deductible for income tax purposes

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Definitions:

Bank Accounts

Financial accounts maintained by individuals or businesses in a banking institution for the purpose of managing money.

Takings Clause

A clause in the Fifth Amendment of the U.S. Constitution requiring that when government uses its power to take private property for public use, it must pay the owner just compensation, or fair market value, for the property.

Condemnation

The legal process by which government or a legal entity takes private property for public use, with compensation to the owner.

Fifth Amendment

An amendment to the U.S. Constitution that provides several protections to individuals, including protection against self-incrimination and double jeopardy, and ensures due process of law.