Merrill is a participant in a SIMPLE § 401(k) plan, and he elects to contribute 4% of his $40,000 compensation to the account, and his employer contributes 3%.What amount, if any, will vest immediately?
A)$0
B)$1,200
C)$1,600
D)$2,800
E)None of these

Question

Quizplus · Accepted Answer

In a SIMPLE § 401(k) plan, both the employee's contributions and the employer's contributions are immediately 100% vested. Merrill contributes 4% of his $40,000 salary, which is $1,600, and his employer contributes 3%, which is $1,200. Therefore, the total amount that vests immediately is $1,600 + $1,200 = $2,800.

Merrill Is a Participant in a SIMPLE § 401(k) Plan