Exam 11: Nonqualified Deferred Compensation Plans for Executives

Only ERISA Title I holds provisions setting minimum standards required to qualify pension plans for favorable tax treatment.(ERISA Qualification Criteria)

According the U.S.Treasury Regulations,the term "officer" means an administrative executive who is in regular and continued service and holds the authority of an officer,regardless if they hold the title of an officer.(Key Employees)

Funded plans allocate money to trust funds or insurance company contracts in an executive's name.(Funding Status)

A phantom stock plan is characterized by which one of the following? (Phantom Stock Plans)

Companies use platinum parachutes to avoid legal battles or negative media publicity by paying off a CEO to give up his or her post.(Platinum Parachutes)

Rabbi trusts are characterized by which one of the following features? (Rabbi Trusts)

Qualified plans allow executives to accumulate substantially more money for retirement than nonqualified plans.(Defining Nonqualified Deferred Compensation Plans (NQDC))

Which of the following is not a type of stock option plan? (Stock Options and Stock Purchase Plans)

The endorsement approach designates the employer as owner.(Split-Dollar Life Insurance)

Collateral approach is a term used to indicate employer ownership of an insurance policy.(Split-Dollar Life Insurance)

The Age Discrimination in Employment Act does not forbid employers from setting a mandatory retirement age for employees who are 65 years old.(Mandatory Retirement Age)

Excess benefits plans can only be funded plans.(Excess Benefit Plans)

With unfunded plan,executives may forfeit retirement benefits when a company becomes bankrupt or financially insolvent or following a change of company ownership.(Funding Status)

A funding mechanism is synonymous with funded plans.(Funding Mechanisms)

Executive retirement plans adhere to ERISA's nondiscrimination rules.(ERISA Qualification Criteria)

A company may choose to add to the vesting period a performance criterion for determining whether to award stock options or stock units,commonly referred to as restricted stock units.(Restricted Stock Plans and Restricted Stock Units)

Corporate-owned life insurance can be used by employers to recover the costs of nonqualified deferred compensation.(Corporate-Owned Life Insurance)

This type of executive retirement plan is unfunded and can be issued upon retirement,termination,or death,but the assets must be released to creditors if the company files for insolvency or bankruptcy.(Rabbi Trusts)

According the Internal Revenue Code,this person was a five percent owner at any time during the year or the preceding year; or,for the preceding year,the employee had compensation in excess of $120,000 in 2017 and was in the top-paid group of employees.(Highly Compensated Employees)

Which is not a factor associated with the decision to fund a nonqualified plan? (Funding Status)