Author Question: Early distributions from qualified retirement plans are assessed a 10 percent penalty. However, ... (Read 73 times)

Yolanda · **on:** Jul 11, 2018

Early distributions from qualified retirement plans are assessed a 10 percent penalty. However, there are some exceptions to this rule. All of the following distributions are exempt from the penalty tax EXCEPT

A) lump-sum distributions made after age 59.5.
B) lump-sum distributions made directly to the employee at any age when he or she changes employers.
C) lump-sum distributions made after the death or permanent disability of the employee.
D) distributions that are part of a series of substantially equal payments over the worker's life expectancy.

Question 2

ABC Company offers a qualified retirement plan. ABC selected a funding instrument with an insurer in which the insurer promised to pay a specified interest rate for a number of years on a lump sum deposit. This funding instrument is called a

A) trust-fund plan.
B) group deferred annuity.
C) separate investment account.
D) guaranteed investment contract.