An Internal Revenue Code Rule That Impacts the Design of Pension

question 73

Multiple Choice

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

• A) employee contributions to the pension fund are not taxable to the employee 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 at the time pension benefits are actually received.
• D) all employer pension expenses are deductible for income tax purposes.

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Definitions:

Bretton Woods System

A monetary management system established in 1944, which set fixed foreign exchange rates for currencies in relation to the U.S. dollar and established the International Monetary Fund (IMF) and the World Bank.

World Economy

The global network of economic activities and interactions among countries' economies, including trade, investment, and currency exchange.

Gold Production

The process of extracting gold ore from the earth and refining it into pure gold.

Balance of Payments

A record of all economic transactions between the residents of a country and the rest of the world in a given period of time, which includes the trade balance, foreign investments, and loans.