Question

What are some examples of different reasons an employer might have for adopting a qualified plan? How might the different reasons for adopting a qualified plan impact on the type of plan a company would adopt?

Answer 1

Answer:-

Some examples of different reasons an employer might have for adopting a qualified plan:-

• Favourable tax treatment for the employer
• It allows the portion of the employer contribution to be eligible for tax deductible
• Availability of current tax deferral of the employer contributions
• Plan participants are not taxed till the time they start making the withdrawls frrom there accounts

The differnt reasons as mentioned above basically drive the nature of a plan the company would go in or opt for.