Homer Tanner, a foreman at Wellville Steel, pays the premium for a long-term disability policy that has a three-month waiting period and replaces 70% of pay. Homer suffered brain damage in an auto accident. Full recovery took nine months. Six months after the accident, Homer was able to return to work on a part-time basis. Still very unsteady on his feet, Homer oversaw just one section of the production line while in a wheelchair. Homer’s long-term disability payments ceased when he went back to work. Which of the following is true?(I)Homer’s long-term disability payments were taxed as ordinary income(II)Homer’s long-term disability payments were tax-free(III)the definition of disability in his long-term disability policy was “own occupation”(IV)the definition of disability in his long-term disability policy was “qualified for”(V)the definition of disability in his long-term disability policy was “total and permanent”

Employees can make in-service withdrawals from their 401(k) plans.

S corporation shareholders who own more than 50% of the business and are also employees of the corporation should

Tod Gristham, owner of Gristham Enterprises, wants to implement one retirement plan that will reduce turnover to about 2% a year, favor key employees, help forestall unionizing among his rank-and-file workers, and hold costs down to between 1% and 2% of company net profit. When you meet with Tod, which step of the employee benefit planning process is most important to cover with him?

Employees of the Design Line, an exclusive women’s clothing store, can purchase clothing from the store at 20% off retail. The owner of Design Line also can offer this employee discount to

The owner of Braxton Steel Corporation has been discussing installation of a legal services plan at Braxton. The owner has asked you to explain the features of an open-panel prepayment legal services plan. You reply

Which of the following options is not an advantage of defined benefit plans?

HMOs try to control costs by emphasizing preventative care.

Jack Breem works for Metro Corp. Metro uses a calendar year accrual method of tracking financial transactions. Jack earned a bonus in December of this year. Which of the following is true?

If ERISA’s pension plan rules do not apply, a severance plan can cover: