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Basic Question 5 of 5

Companies generally design pension plans that are

A. contributory or noncontributory.
B. insured.
C. qualified.
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User Contributed Comments 1

User Comment
blackyosh1 qualified plan: employers contributions are deductible as a business expense but are not taxable income to employee until they are received as benefits. investment earnings on funds held by trustee for plan are not subject to income taxes as they are earned

nonqualified plans: employer funding contributions cannot be deducted as business expense unless classified as compensation to employee, in which case they become taxable income for employee.

basically no tax benefits. usually for highly paid executives benefit?
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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes

Barnes

Learning Outcome Statements

describe the types of post-employment benefit plans and implications for financial reports;

CFA® 2025 Level II Curriculum, Volume 2, Module 11.