Lifecycle of a Plan
Describe the "three legged stool"
1. Money you have saved yourself
2. Funds in retirement plans-401K and Pension
3. Social Security
What is the "entry date"?
The date upon which an eligible employee becomes a plan participant
"NRA" stands for:
"Normal Retirement Age"
What is "interest" and how does it apply to a 401K loan?
The cost of borrowing money; it is the excess repaid over the principal amount borrowed and is paid back into the ppt's account
What is the period called between when the plan leaves the old record keeper and when it becomes active with the new record keeper?
Blackout
What are the two types of vesting schedules?
Cliff and Graded
How old does a ppt need to be to be eligible for a "catch up" contribution (if the plan offers it)?
50 years old
Alternative way to say "Termination of Employment"
"Separation from Service"
"Amortized" means....
The distribution of loan repayments over the term of a loan/The payment schedule
Explain "mapped investments"
Investments with the new record keeper that have similar asset classes, performance, and investment risks as the previous record keeper
A smaller version of the plan document available to participants is called the:
SPD (Summary Plan Description)
Explain key difference between a ROTH contribution and an after-tax contribution
ROTH contributions are tied to the yearly IRS maximum requirement where the after tax contribution is not
"RMD" stands for what and how applicable to 2023?
"Required Minimum Distribution"
For 2023, ppt needs to be terminated and age 73 as of 12/31/2023
Loan repayments are always repaid with what money type?
After tax funds
Proposals being issued to various service providers who will complete with descriptions of the services they provide and their investment performance are called:
RFP's
Any person (individual or corporation) who considers your needs above thier own, who exercises discretionary authority or control over the management or disposition of plan assets is called a:
Fiduciary
QDIA stands for and means:
"QDRO" stands for and when applicable
"Qualified Domestic Relations Order"- Court Order awarding part of a benefit to someone else
Divorce, separation, child support, business failure
IRS requirements for loans from a 401K (which may not be exactly the same as what an individual plan adopts)
1/2 of the vested balance with a maximum amount of $50K in any rolling 12 month period
Name a Milliman plan that has trustee directed investments
221SEU (SEIU)
What is meant by a Hybrid Plan and give an example of a Milliman client.
Combines DB and DC plans together-
Parkland, Modesto, Noble, Motiva
A recordkeeping method whereby participant accounts are valued every business day.
Daily Valuation
What is the "needs test" and when is it administered?
The test to determine the amount necessary to satisfy financial needs, as applicable to 401(k) hardship withdrawals
What causes a loan to be called "deemed" instead of "defaulted"?
A "deemed" loan can still be paid off before becoming taxable (within the cure period)/A "defaulted" loan is now taxable (past the cure period)
Bill owns 3% of the company and currently earns about $75k annually. He is married to Sarah who owns 85% of the company. For testing purposes he would be considered...
an HCE (since married/related to a 5% owner)