75. Which of the following qualified plans is an employer-sponsored IRA?
Answer: A
Simple Employee Pension Plan (SEP) is an employer-sponsored IRA.
A Simple Employee Pension Plan (SEP) is a type of employer-sponsored retirement plan that allows employers to make tax-deductible contributions to individual retirement accounts (IRAs) set up for their employees.
A) Simple Employee Pension Plan (SEP)
This option is correct because a SEP is specifically designed for employers to contribute to their employees' retirement savings through IRAs, making it a qualified plan under IRS guidelines.
B) Key-employee plan
A key-employee plan is not an IRA; rather, it is a type of non-qualified deferred compensation plan that provides benefits to key employees. Hence, it does not qualify as an employer-sponsored IRA.
C) Tax-Sheltered Annuities
Tax-sheltered annuities, also known as 403(b) plans, are retirement plans available to certain employees of public schools and tax-exempt organizations. While they are employer-sponsored, they do not fall under the category of IRAs.
D) Deferred Compensation
Deferred compensation plans are arrangements where an employee agrees to receive a portion of their earnings at a later date. Like the key-employee plan, this is a non-qualified plan and does not represent an IRA.
Conclusion
The Simple Employee Pension Plan (SEP) is the only option that qualifies as an employer-sponsored IRA, allowing contributions directly to employees' IRAs. All other options listed do not meet the criteria for being classified as an IRA, highlighting the unique nature of the SEP in the context of employer-sponsored retirement plans.