Which of the Following Statements Comparing Qualified Defined Contribution Plans

question 84

Multiple Choice

Which of the following statements comparing qualified defined contribution plans and nonqualified deferred compensation plans is false?

• A)Employers must fund qualified defined contribution plans but not nonqualified deferred compensation plans.
• B)Qualified defined contribution plans are subject to formal vesting requirements while nonqualified deferred compensation plans are not.
• C)Distributions from both types of plans are taxed at ordinary income tax rates.
• D)In terms of tax consequences to the employee, earnings on qualified plans (except Roth plans)are deferred until distributed to the employee but earnings on nonqualified plans are immediately taxable.

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Definitions:

Education

The systematic process of facilitating learning, or the acquisition of knowledge, skills, values, beliefs, and habits through various methods like teaching, training, research, and personal development.

Religious Toleration

The acceptance of diverse religious beliefs and practices, often institutionalized through laws allowing for freedom of worship and the practice of religion without persecution.

Chesapeake Area

A region in the United States including and surrounding the Chesapeake Bay, significant for its history, economy, and ecological diversity.

Massachusetts Bay

A region in the northeastern United States, centered around the body of water with the same name, historically significant for being a major site of early English colonization in America.