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CTP · Question #795
CTP Question #795: Real Exam Question with Answer & Explanation
The correct answer is D. The plan did not meet the minimum coverage requirements.. See the full explanation below for the reasoning.
Question
- (Topic 8) Since the inception of ABC Company's pension plan, 1,500 employees qualified and were paid pensions of $500 million after retirement, of which 700 employees were those who earned $110,000 or more and received $200 million in pension benefits. When the company filed for bankruptcy in 2010, the IRS claimed back taxes from the company stating that the pension plan was not qualified under ERISA. On what basis was the IRS MOST LIKELY making its claim?
Options
- AAdequate funds were not available to meet the plan's obligations.
- BPension benefits were not safeguarded when the pension plan was terminated.
- DThe plan did not meet the minimum coverage requirements.
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