Question 83

A 1,500-employee for-profit corporation can establish a 401(k) retirement plan.

A 401(k) retirement plan is a popular choice for for-profit corporations, including those with 1,500 employees, as it allows employees to save and invest a portion of their paycheck before taxes are taken out.

A) 401(k).

This option is correct because 401(k) plans are specifically designed for for-profit organizations to provide a tax-advantaged retirement savings option for their employees. With a corporation of this size, establishing a 401(k) plan is practical and beneficial for both the employer and employees.

B) 403(b).

A 403(b) plan is typically available for non-profit organizations and certain public sector employees, such as teachers and government workers. Therefore, it is not applicable to a for-profit corporation, making this option incorrect.

C) Keogh.

Keogh plans are intended for self-employed individuals and small business owners, rather than larger corporations. Since a 1,500-employee corporation does not fit this category, this option is also incorrect.

D) Simplified Employee Pension Plan.

While a Simplified Employee Pension (SEP) Plan can be established by for-profit businesses, it is generally more suitable for smaller employers. Given the size of the corporation in question, a 401(k) plan would be more appropriate and advantageous, making this option less suitable.

Conclusion

The 401(k) plan is the most appropriate retirement plan for a for-profit corporation with 1,500 employees, as it aligns with the corporation's structure and provides significant benefits for employee retirement savings. Other options, such as the 403(b), Keogh, and SEP, either do not match the corporate structure or are better suited for different types of organizations, reinforcing the correctness of the 401(k) selection.