AD Banker Comprehensive Practice Exam

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Enhance your exam readiness with the AD Banker Comprehensive Exam guide. Includes flashcards and multiple-choice questions with explanations.

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Which of the following is not eligible to participate in a HR-10 Keogh Plan?

Manager
Silent partner
Sales person
Secretary

The correct answer is: Silent partner

A HR-10 Keogh Plan is a type of retirement plan specifically designed for self-employed individuals and unincorporated businesses. To be eligible to participate in a Keogh plan, individuals typically must have a self-employed status or be a partner in a business. Silent partners, who invest in a business but do not take part in its management or operations, do not qualify for participation in a HR-10 Keogh Plan. This type of plan is intended for those who are actively engaged in the business operations and generating self-employment income. On the other hand, roles such as managers, sales persons, and secretaries can potentially qualify if they are self-employed or earn income from their business activities, thus making their contribution to a Keogh Plan feasible. This distinction is critical for understanding eligibility, as contributions to a HR-10 generally rely upon the participant having income derived from a self-employment source.