Teresa just received a quarterly statement from the Vanguard Group, which shows earnings from investments using her pre-tax dollars. Teresa contributes a percentage of her salary to the plan and her company matches it. Teresa is participating in a(n)________.
A)pension plan
B)401(k)
C)profit sharing plan
D)ESOP

Question

Quizplus · Accepted Answer

The statement mentions pre-tax dollars, percentage of salary contribution, and company matching, which are all key features of a 401(k) retirement plan. Pension plans typically do not have individual employee contributions or company matches, profit sharing plans usually distribute profits as a cash bonus rather than as investment earnings, and ESOPs are employee stock ownership plans that invest primarily in company stock, which is not mentioned in the statement.

Teresa Just Received a Quarterly Statement from the Vanguard Group