Q:
Jason Sanborn is a senior-level executive with Beanster Brew, one of the world's largest coffee bean importers. To sweeten his contract, Beanster offered Mr. Sanborn a retirement plan that pays 57% of his salary per year for the rest of his life, beginning at age 65. Which of the following situation does this arrangement describe:
a) a profit sharing plan
b) An ERISA infraction
c) A qualified retirement plan
d) A contribution limit
e) A non-qualified plan
A:
The correct answer is e)
This is an example of a non-qualified retirement plan; it is also evidence of a defined benefit plan.

RELATED FAQS

  1. Based on the Employment Retirement Income Security Act (ERISA), a retirement plan ...

    The correct answer is b. With regard to eligibility, the plan must cover all employees 21 and older who have worked for the ...
  2. Is a 401(k) a qualified retirement plan?

    Examine the different types of qualified retirement plans, and discover if a 401(k) meets the definition of a qualified retirement ...
  3. What are qualified retirement plan types?

    Understand the different types of qualified retirement plans and what they mean in terms of employee and employer contribution ...
RELATED TERMS
  1. Non-Qualified Plan

    Any type of tax-deferred, employer-sponsored retirement plan ...
  2. Target-Benefit Plan

    A benefit plan that is similar to a defined benefit plan since ...
  3. Variable Benefit Plan

    A type of retirement plan in which the payout changes depending ...
  4. Supplemental Executive Retirement Plan - SERP

    A non-qualified retirement plan for key company employees, such ...
  5. Active Participant Status

    Active-participant status is a reference to an individual's participation ...
  6. Plan Participant

    A plan participant either contributes into a pension plan or ...
Hot Definitions
  1. Leverage

    1. The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment. ...
  2. Trumponomics

    Trumponomics is a term for the economic policies of President Donald Trump.
  3. Universal Health Care Coverage

    An organized healthcare system that provides healthcare benefits to all persons in a specified region. Many countries, such ...
  4. Davos World Economic Forum

    The annual meeting of the World Economic Forum hosted at Davos—a small ski town in Switzerland—in January each year is among ...
  5. Smart Home

    A convenient home setup where appliances and devices can be automatically controlled remotely from anywhere in the world ...
  6. Efficient Frontier

    A set of optimal portfolios that offers the highest expected return for a defined level of risk or the lowest risk for a ...
Trading Center