PSI Life Exam Practice Test

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Prepare for the PSI Life Exam. Study with detailed flashcards and multiple choice questions, complete with hints and explanations. Excel in your forthcoming test!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Which of the following is NOT a requirement of a qualified plan?

It must be available to all employees
It must discriminate as to who can participate
It must have specific contribution limits
It must be established for the exclusive benefit of employees

The correct answer is: It must discriminate as to who can participate

The choice stating that a qualified plan must discriminate as to who can participate is not a requirement for these types of plans. In fact, qualified plans are designed to be inclusive and must comply with specific nondiscrimination rules set by the IRS. These rules ensure that benefits do not favor high-income employees or shareholders over lower-income employees, allowing for equitable participation. Qualified plans have requirements that include being available to all employees (ensuring broad access), having specified contribution limits (to maintain tax-advantaged status), and being established for the exclusive benefit of employees (to ensure that the primary focus is on employee retirement benefits). All these requirements promote fairness and are essential for a plan to maintain its qualified status under IRS regulations.