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Which of the following is not a defined contribution plan subject to ERISA?

a. ESOP
b. Profit Sharing Plan
c. VEBA
d. Thrift Plan

User Merri
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1 Answer

3 votes

Final answer:

VEBA is not a defined contribution plan; it is a type of trust used to provide employee benefits and is not structured like typical retirement plans such as 401(k)s and 403(b)s. The correct option is C.

Step-by-step explanation:

The question asks which of the following is not a defined contribution plan subject to ERISA - Employee Stock Ownership Plan (ESOP), Profit Sharing Plan, Voluntary Employees' Beneficiary Association (VEBA), or Thrift Plan. Among these, VEBA is not a defined contribution plan.

Defined contribution plans include options such as 401(k)s, 403(b)s, ESOPs, Profit Sharing Plans, and Thrift Plans, where employers contribute a fixed amount to the worker's retirement account, which is then invested. These contributions are typically made on a regular basis, and the plans are portable and tax-deferred.

VEBAs, on the other hand, are a type of tax-free trust used to provide employee benefits that are not specifically designed as retirement plans.

User Gizmo
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