Which of the Following Is Not True Regarding Minimum Standards

question 62

Multiple Choice

Which of the following is not true regarding minimum standards under the Employee Retirement Income Security Act?

• A)The minimum standards for pension plans must be met for the employee pension plans to  qualify for preferential tax treatment.
• B)Preferential tax treatment enables an employer to deduct contributions to qualified benefit plans immediately.
• C)ERISA does not consider the deductions as income to participating employees until they receive the payments after retirement.
• D)Compliance to ERISA minimum standards by qualifying their benefit plans is mandatory.

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Definitions:

Undue Influence

The use of excessive pressure by the dominant member of a confidential relationship to convince the weaker party to enter a contract that greatly benefits the dominant party.

Durable Power of Attorney

A legal document that grants a trusted person the authority to act on behalf of another person in legal or financial matters, continuing or taking effect in the event of incapacity.

Incapacitating Illness

A severe health condition that significantly impairs a person's ability to perform ordinary daily activities.

Legal Rights of Inheritance

The statutory or customary rights governing the transfer of property or titles upon the death of the owner to the legal heirs.