Which of the Following Statements Comparing Qualified Defined Contribution Plans

question 111

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:

Middle Ages

A historical period in Europe lasting from the 5th to the late 15th century, marked by the fall of the Western Roman Empire and preceding the early modern era.

Superego

In Freudian psychoanalysis, the part of a person's mind that acts as a self-critical conscience, reflecting social standards learned from parents and teachers.

Ego

In psychoanalytic theory, represents the part of the mind that mediates between the conscious and the unconscious and is responsible for reality testing and a sense of personal identity.

Id

The part of the mind in psychoanalytic theory responsible for instinctual drives and desires.