THE PENSION/401(K) FINANCIAL PLANNER QUIZ

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This is the definitive test for any planner whether a Certified Planner, PFS, working for American Express or Merrill Lynch, etc.- or yourself- in regards to working with employees at any firm that have employer's stock in a qualified plan. I would submit that maybe 1 in 500,000 planners know the answer to this. Here goes.

An employee has stock in a plan that was valued at $5.00. When he retired, the stock was worth $30.00. If he rolled the stock to an IRA at $30.00 per share to continue the tax deferral and the stock was worth $50.00 when he died, what do his beneficiaries get?

In the alternative, what else might the employee do and what are the ramifications?

ANSWER