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. Mike is a highly compensated employee of XYZ Company, his company has offered him ...

    The correct answer is b): One of the most common types of nonqualified retirement plans is the deferred compensation plan. ...
  2. What is the difference between qualified and non-qualified plans?

    Qualified and non-qualified retirement plans are created by employers with the intent of benefiting employees. The Employee ...
  3. 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 ...
  4. Can you fund nonqualified deferred compensation plans with life insurance?

    Understand if a person can fund nonqualified deferred compensation plans with life insurance. Learn what types of plans are ...
  5. How does a defined benefit pension plan differ from a defined contribution plan?

    Learn the differences between defined benefit plans and defined contribution plans when reviewing employer-sponsored qualified ...
  6. What is the difference between a 401(k) plan and a 457 plan?

    Discover how 401(k) plans are privately offered employee retirement plans, while 457 plans are typically available to public ...
RELATED TERMS
  1. Non-Qualified Plan

    Any type of tax-deferred, employer-sponsored retirement plan ...
  2. Top Hat Plan

    A form of retirement plan available only to selected company ...
  3. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  4. Target-Benefit Plan

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

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

    A non-qualified retirement plan for key company employees, such ...
Hot Definitions
  1. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  2. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  3. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  4. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  5. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  6. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
Trading Center