Retirement Planning

1) Cheque Company has 100 eligible employees and sponsors a defined benefit pension plan. The company is unsure if they are meeting all of their testing requirements. How many employees (the minimum) must be covered by Cheque Company’s defined benefit pension plan for the plan to conform with ERISA?

* 40

2) Aztec clay distributor is a family owned business that is owned by Alice, Bill, Chad and Zion. Zion is not an employee, rather a silent or somewhat silent partner. Alice and Bill are married and Chad is their 25-year-old son who has a degree in Soil Science from Dhaka University in Bangladesh. The employee census information is in the chart below.

Employee          Ownership         Salary           Deferral Plan      Balance          Status

Alice                       30%                         $330,000          $20,000                   $40,000                officer

Bill                          3%                           $210,000          $20,000                   $600,000

Chad                        4%                           $80,000            $10,000                   $150,000

Dave                        0%                           $180,000          $15,000                   $150,000             officer

Erin                          0%                           $140,000          $15,000                   $100,000

Frank                        0%                           $50,000            $8,000                     $50,000              

Ginger                      0%                           $40,000             $0                            $10,000                        

Haley                        0%                           $30,000             $2,000                    $30,000              

Irish                          0%                           $20,000             $1,000                     $10,000              

Jen                           0%                           $10,000            ...