Kaysia participates in a SIMPLE plan provided by her employer.In 2017,she contributes 6% of her $50,000 salary,and her employer contributes 3% to the plan.What amount of the contributions will be vested in her account at the end of 2017?

Question

Quizplus · Accepted Answer

According to the terms of the SIMPLE plan, Kaysia contributes 6% of her salary, which is $3,000 (6% x $50,000). Her employer contributes 3% of her salary, which is $1,500 (3% x $50,000).

The vested portion of Kaysia's contributions is always 100%, so $3,000 will be fully vested in her account at the end of 2017.

For the employer's contributions, there is a vesting schedule that determines how much is vested based on the number of years of service. However, since we are only given information for 2017, we can assume that Kaysia has not yet completed any years of service and therefore has no vested portion for the employer's contributions.

Therefore, the total vested amount in Kaysia's account at the end of 2017 is $4,500 ($3,000 from her contributions and $1,500 from her employer's contributions, which are not yet vested).

The correct answer is A) $4,500.

Kaysia Participates in a SIMPLE Plan Provided by Her Employer