Section 401(k) Plans Allow Employees to Contribute a Portion of Their

question 89

True/False

Section 401(k) plans allow employees to contribute a portion of their current wages or salary to a tax-exempt retirement account. However, the contributed portion is still taxable compensation to the employee.

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Definitions:

Unauthorized Acts

Actions taken by an individual or entity without legal or official approval, which may be illegal or against regulatory standards.

Undisclosed Principal

In agency law, a principal whom a third party lacks knowledge or the reason to know the principal’s existence and identity.

Unidentified Principal

In agency law, a principal whom a third party knows or has reason to know exists but who lacks knowledge or reason to know the principal’s identity.

Legally Non-Existent

Refers to an entity or agreement that has no recognition or validity under the law.