Society For Human Resource Management (SHRM) Certified Professional Practice Exam

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Study for the SHRM Certified Professional Exam with flashcards and multiple choice questions. Each question includes hints and explanations to help you understand key HR concepts. Prepare for your certification with confidence!

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What can Randall utilize after reaching the maximum contribution amount for his 401K plan?

Point of Service plan
Excess deferral plan
Cash balance plan
Money-purchase plan

The correct answer is: Excess deferral plan

After Randall reaches the maximum contribution amount for his 401(k) plan, he can utilize an excess deferral plan. This type of plan allows individuals who have reached the contribution limit on their primary retirement accounts to contribute additional funds, typically into a separate retirement vehicle designed to accommodate those excess contributions. The excess deferral plan is particularly relevant for individuals who may be facing higher income levels or who have experienced changes in their employment status that allow for significant additional contributions after reaching their 401(k) limits. Utilizing this plan can help maximize retirement savings and provide more options for tax-advantaged growth. It's worth noting that the other options listed do not serve the same purpose as an excess deferral plan regarding managing surplus contributions specifically after reaching a 401(k) limit.