1.
Please set up a 401(k) plan that includes both 401(k) and 401(k) Roth. The carrier is Principal. They want the contributions and deferrals to be ACH’ed to them. Set up the payee and use a routing # from your bank. Make up an account number. You will have two EE Contribution Plan Matches, one for regular EEs that has a tiered match of First 1% @ 100%, next 2% @ 50% and the last 3% at 25%. The second match for executives has one tier. First 4% at 100%. The company also has an Eligible Wage Plan Match (Safe Harbor) Match of 3%. It will go to all EEs. EE deferrals begin first day of the month after 6 months from their hire date with a forced deferral of 3% unless they opt out or choose a different amount. The client wants this to happen automatically. Matches begin on the first day of the month following 1 year from their hire date. Start date of the plan was 1/1/2013. Use all eligible wage earnings you have except any reimbursement type earnings. Do not use any Eligible Wage Memo Calcs nor any Eligible Wage Reductions. Three of the EEs have loans. The client tells you that 2 of them are first time loans and one of them is on his third loan. Please email screen shots to your presenter.
2.
The Payroll Implementation Specialist will most likely set up a 401(k) “shell” because
Correct Answer
B. Percentage deferrals and contributions will not work without a Deferred Comp plan set up.
Explanation
The correct answer is "Percentage deferrals and contributions will not work without a Deferred Comp plan set up." This is because a 401(k) plan requires a Deferred Compensation (Deferred Comp) plan to be set up in order for percentage deferrals and contributions to work properly. Without a Deferred Comp plan, the payroll system would not be able to accurately calculate and process the employee's contributions to their 401(k) plan.
3.
Which of the following is not true
Correct Answer
A. You can create multiple Deferred Comp benefit types on the company level.
Explanation
The statement that is not true is "You can create multiple Deferred Comp benefit types on the company level." This means that it is not possible to create multiple Deferred Comp benefit types on the company level.
4.
Which of the following are not setup under Deferred Comp
Correct Answer
D. All of the above are set up under Deferred Comp
Explanation
All of the options listed, including 403(b) plans, pension plans, and profit sharing, are set up under Deferred Comp. This means that all of these options are part of a deferred compensation arrangement, where employees can defer a portion of their income to be received at a later date, typically during retirement.
5.
Fill in the blank: An EE may continue contributing to a Deferred Comp after he/she has taken out a loan.
Correct Answer
C. Sometimes (depends on the client’s contract with the carrier).
Explanation
An EE may continue contributing to a Deferred Comp after he/she has taken out a loan sometimes, depending on the client's contract with the carrier.
6.
Regarding multiple Deferred Comp plans on the same Deferred Comp benefit type, one could say:
Correct Answer
D. If you do it, the EE CANNOT be enrolled in multiple plans under the same benefit types. The system kicks you out or terms one of the plans.
Explanation
Having multiple Deferred Comp plans on the same Deferred Comp benefit type is not a problem. It is similar to setting up different medical plans under the Pre-tax Medical benefit type. However, it is recommended to only do it when multiple deduction codes, including 401(k) loans, are needed. If an employee is enrolled in multiple plans under the same benefit types, the system will kick them out or terminate one of the plans.
7.
The Export Code field on the Plans tab of the Deferred Comp plan is required because
Correct Answer
C. It is actually not required
Explanation
The Export Code field on the Plans tab of the Deferred Comp plan is actually not required. This means that it is not necessary to fill in this field in order to successfully complete or use the plan. It is not needed for eBN Carrier Connections or COBRA, and the match codes will still work without it.
8.
Which of the following is false
Correct Answer
D. When you put the Third Party in the Provider field, it will send the funds to the Deferred Comp carrier.
Explanation
When you put the Third Party in the Provider field, it will not send the funds to the Deferred Comp carrier.
9.
Evaluate the following Tiered Match statement: Match is: First 2% @ 100%, next 2% @ 50%, final 3% @ 25%.
Correct Answer
B. If an EE were to defer 2%, he would get 100% Match.
Explanation
The given explanation states that if an employee were to defer 2% of their salary, they would receive a 100% match. This aligns with the tiered match statement provided, which states that the first 2% of the employee's deferral will be matched at 100%. Therefore, the correct answer is that if an employee were to defer 2%, they would receive a 100% match.
10.
A Forced % Enrollment means
Correct Answer
A. A default value goes on the Calculations Parameter tab on the deduction code and working in conjunction with the auto-enroll feature will automatically enroll any eligible person with this deferral percentage
Explanation
A Forced % Enrollment means that a default value is set on the Calculations Parameter tab of the deduction code. This default value, when used in conjunction with the auto-enroll feature, will automatically enroll any eligible person with the specified deferral percentage. The employee must have this default percentage on their enrollment record when they sign up. The HR Admin does not need to manually enroll each person with the same deferral percentage. However, it is important to note that this forced enrollment only applies to the deferral, and any type of match must still be manually entered.
11.
Auto-Enroll (to add a blank enrollment record on the EE level) is used mostly with the “shell” setup because:
Correct Answer
D. All of the above.
Explanation
Auto-Enroll is used with the "shell" setup because it is needed for forced percentage enrollments, eligible wage plan matches, and to make straight deductions work. Therefore, the correct answer is "All of the above."
12.
You must ask the client which 401(k) Loan # deduction code to apply to a person with a loan because you cannot assume that just because the EE only has one loan that it is their 1st loan.
Correct Answer
A. True
Explanation
The explanation for the given correct answer is that it is important to ask the client which 401(k) Loan deduction code to apply to a person with a loan because having only one loan does not necessarily mean it is their first loan. It is necessary to confirm the loan details with the client to ensure accurate and appropriate deductions are made.
13.
An Eligible Wage Plan Match only works if the EE has a deferral as well.
Correct Answer
B. False
Explanation
An Eligible Wage Plan Match does not require the employee (EE) to have a deferral. It is a type of retirement plan where the employer matches a certain percentage of the employee's wages contributed to the plan. This match is independent of whether the employee chooses to defer a portion of their wages or not. Therefore, the statement that an Eligible Wage Plan Match only works if the EE has a deferral is incorrect.
14.
If you are doing a full setup, you will need to check the 401(k) Loan Deductions boxes on the Plans Deduction section of the Plans tab of the Deferred Comp plan, because 401(k) loans can directly affect your reporting even though they are managed through Payroll.
Correct Answer
A. True
Explanation
When setting up a full setup, it is necessary to check the 401(k) Loan Deductions boxes on the Plans Deduction section of the Plans tab of the Deferred Comp plan. This is because 401(k) loans can have a direct impact on reporting, even though they are managed through Payroll.
15.
You will build your Match memo calcs under the Payroll\Memo Calcs section.
Correct Answer
B. False
Explanation
The correct answer is False because the statement is incorrect. The Match memo calcs should not be built under the Payroll\Memo Calcs section.
16.
Whether the deductions are run from Payroll or from the Benefits module, the EE will always need a Deferred Comp enrollment record.
Correct Answer
A. True
Explanation
This statement is true because regardless of whether the deductions are run from the Payroll module or the Benefits module, the employee will always need a Deferred Comp enrollment record. This means that regardless of the specific module used, the employee must have a record indicating their enrollment in Deferred Compensation in order for the deductions to be processed correctly.
17.
You do not need to use the Match Eligibility tab unless you have multiple matches or the single match you have does not have the same eligibility as the plan.
Correct Answer
A. True
Explanation
The statement is suggesting that the Match Eligibility tab is not necessary unless there are multiple matches or if the single match does not have the same eligibility as the plan. Therefore, the answer "True" indicates that the statement is correct and there is no need to use the Match Eligibility tab unless the mentioned conditions are met.
18.
You can easily setup an eligibility filter using “Normal Hours” under the EE Payroll section to determine if an EE meets the eligibility requirement of having worked 1000 hours.
Correct Answer
B. False
Explanation
The correct answer is False. The explanation is that you cannot set up an eligibility filter using "Normal Hours" under the EE Payroll section to determine if an EE meets the eligibility requirement of having worked 1000 hours.
19.
Never use the “Auto Adjust Based on YTD Amounts” check box as it will mess up the match for any EE that has not deferred from the beginning of the plan year.
Correct Answer
A. True
Explanation
Enabling the "Auto Adjust Based on YTD Amounts" check box can cause issues with matching for employees who have not deferred from the start of the plan year. This suggests that using this option may lead to incorrect calculations or discrepancies in the matching process. Therefore, the statement "Never use the 'Auto Adjust Based on YTD Amounts' check box as it will mess up the match for any EE that has not deferred from the beginning of the plan year" is true.
20.
If you do not check the “Limit to Specified Deductions” box and the appropriate sub- boxes every time, the match will not calculate on the deferral.
Correct Answer
B. False
Explanation
If you do not check the "Limit to Specified Deductions" box and the appropriate sub-boxes every time, the match will still calculate on the deferral. Therefore, the statement "the match will not calculate on the deferral" is incorrect.