CFA Practice Question

There are 334 practice questions for this study session.

CFA Practice Question

A firm with an overfunded pension plan most likely has a tax incentive to take which one of the following actions regarding its annual funding decision?
A. It will fund the annual service cost only.
B. It will make a larger than normal contribution.
C. It will limit the contribution level to that which is tax-deductible.
Explanation: Tax law places limits on the deductibility of contributions to overfunded plans. Firms with overfunded plans would likely limit their contributions to those that are deductible.

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