What Is the Major Limitation of a SIMPLE Retirement Plan

question 19

Multiple Choice

What is the major limitation of a SIMPLE retirement plan?

• A)It is limited to firms with 100 or fewer employees.
• B)Employee contributions to the plan are limited.
• C)SIMPLE plans are subject to all payroll taxes.
• D)SIMPLE plan funds must be invested in stock market securities.

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Definitions:

Erosion Cost

Costs that occur when a new project or investment negatively affects the revenues or profits of existing projects or investments.

Class A Spa

An upscale facility offering premium health and beauty treatments, differentiated by service, amenities, or exclusivity criteria.

Present Value

The worth at present of a sum of money expected in the future or of ongoing cash payments, when discounted at a specific rate of return.

Capital Cost Allowance (CCA)

A form of tax depreciation that allows a business to deduct the cost of a depreciable property, such as buildings or equipment, over a number of years.