Tanner's employer puts a predetermined portion of profits into a trust account for Tanner's retirement.Which of the following is most likely the type of profit-sharing plan used by Tanner's employer?
A) deferred profit-sharing plan
B) Lincoln incentive system
C) Jefferson incentive system
D) cash plan
E) gainsharing plan

Question

Quizplus · Accepted Answer

A deferred profit-sharing plan is a type of retirement plan in which an employer sets aside a portion of profits for their employees' retirement. These contributions are tax-deferred until the employee retires and starts receiving distributions. This aligns with the scenario described, where Tanner's employer is putting a predetermined portion of profits into a trust account for his retirement. The other options (B, C, D, E) are not relevant to profit-sharing plans.

Tanner's Employer Puts a Predetermined Portion of Profits into a Trust