Chapter 8 - Question 6 :
Please, help me to explain this question. Thank you
ABC Corporation, is considering implementing some form ofretirement plan. The clientâs objectives for the plan, in order ofimportance, are:
1. Rewarding long-term employees
2. Retention of employees
3. Providing a level of income at retirement equal to 50% of anemployeeâs earnings
4. Tax-deductible funding
5. No risk to employees of benefits available
The company indicates it is willing to contribute an amount equalto 30% of payroll to such a plan. The company has been in businessfor 22 years and during the past decade has consistently beenprofitable. Based upon the stated objectives, the most suitableretirement plan for ABC Corporation would be a:
A. Money-purchase pension plan
B. Non-qualified deferred-compensation plan forlong-term employees
C. Combination defined-benefit/401(k) plan
D. Defined-benefit plan
E. Profit-sharing plan
Chapter 8 - Question 6 :
Please, help me to explain this question. Thank you
ABC Corporation, is considering implementing some form ofretirement plan. The clientâs objectives for the plan, in order ofimportance, are:
1. Rewarding long-term employees
2. Retention of employees
3. Providing a level of income at retirement equal to 50% of anemployeeâs earnings
4. Tax-deductible funding
5. No risk to employees of benefits available
The company indicates it is willing to contribute an amount equalto 30% of payroll to such a plan. The company has been in businessfor 22 years and during the past decade has consistently beenprofitable. Based upon the stated objectives, the most suitableretirement plan for ABC Corporation would be a:
A. Money-purchase pension plan
B. Non-qualified deferred-compensation plan forlong-term employees
C. Combination defined-benefit/401(k) plan
D. Defined-benefit plan
E. Profit-sharing plan
