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Exam Series 6 topic 1 question 189 discussion

Actual exam question from FINRA's Series 6
Question #: 189
Topic #: 1
[All Series 6 Questions]

Which of the following statements about non-qualified employer-sponsored retirement plans is false?

  • A. An employer does not have to offer the plan to all employees over 21 years old.
  • B. The earnings on the plan’s contributions remain untaxed until they are withdrawn.
  • C. The plan does not have to abide by ERISA’s vesting requirements.
  • D. The plan may be either funded or unfunded.
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Suggested Answer: B 🗳️
The false statement is that the earnings on the plans contributions remain untaxed until they are withdrawn. Earnings on non-qualified employer- sponsored retirement plans do not grow tax-deferred except for a special situation in which a sizeable forfeiture risk exists. All the other statements are true since non-qualified employer-sponsored plans are exempt from most, if not all, of ERISAs requirements.
by lolojepu at April 6, 2025, 1:23 a.m.

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