Author: Peter Cullen

Profile picture of Peter Cullen

Posts by Peter Cullen

False alarm! IRS withdraws controversial proposed cross-testing regulation provisions

A couple of months ago, the IRS proposed some changes to the §1.401(a)(4) nondiscrimination testing regulations.  On Thursday, they withdrew the part of those proposed regulations that was bad news for plan sponsors, as noted in our prior post. We are pleased the IRS has reconsidered the unintended consequences benefit formula restrictions and “facts and […]Read More… from False alarm! IRS withdraws controversial proposed cross-testing regulation provisions

Surprises in the proposed cross-testing regulations

On January 29th, the IRS proposed revisions to the nondiscrimination testing regulations of §1.401(a)(4).  The title of proposed regulations (and most of the attention generated by them) is focused on the relief for closed defined benefit (DB) plans.  This post summarizes the proposed changes that would affect more than just closed DB plans.  Most of them are […]Read More… from Surprises in the proposed cross-testing regulations

MAP-21: Good News & Bad News for Pension Plans

The “Moving Ahead for Progress in the 21st Century” (MAP-21) legislation signed into law last week included significant pension law changes.  These included good news and bad news for sponsors of defined benefit pension plans. The good news is that MAP-21 provided some relief from the historical low interest rate environment.  The funding segment interest […]Read More… from MAP-21: Good News & Bad News for Pension Plans

Steering Clear of Pension Benefit Restrictions

Negative asset performance and declining valuation interest rates during 2011 will cause some pension plans to face benefit restriction issues for the first time in 2012.   Potential repercussions include limits on accelerated distributions (lump sums), restrictions on plan amendments increasing the value of benefits, mandatory benefit accrual freezes and restrictions on unpredictable contingent event […]Read More… from Steering Clear of Pension Benefit Restrictions

Employers Must Act Quickly to Elect Pension Relief for 2009 or 2010

On December 17, the IRS issued Notice 2011-3.  This Notice provides guidance on single-employer defined benefit plan elections under the Pension Relief Act of 2010.  The Notice provides that the deadline for electing to extend the amortization period is the latest of: (1) the last day of the plan year, (2) 30 days after the […]Read More… from Employers Must Act Quickly to Elect Pension Relief for 2009 or 2010

Cash Balance Interest Credits: Rates Near Record Lows

The Federal Reserve has posted the November Treasury interest rates.  The 10 year constant maturity yield is 2.76%, which is near a record low.  This rate is the basis for many cash balance plan interest crediting rates.  Perhaps this low growth rate will inspire plan sponsors to change the interest credit index.  This is allowed […]Read More… from Cash Balance Interest Credits: Rates Near Record Lows

Threat to Cross-Tested Plans

A Congressional proposal has been introduced that would “severely reduce the attractiveness of cross-tested plans” according to the American Society of Pension Professionals & Actuaries. Cross-tested plans can be used to provide different defined contribution allocations to different groups of employees.  Often cash balance plans are aggregated with a defined contribution plan and cross-tested for […]Read More… from Threat to Cross-Tested Plans

Multiemployer Defined Benefit Plan Summary Report

One little noticed PPA requirement is the multiemployer summary plan report.  It’s due to participating unions and contributing employers within 30 days after 5500 due date (starting with the 2008 5500), so one should have been filed already for most multiemployer pension plans. The Department of Labor was required to publish a model form for […]Read More… from Multiemployer Defined Benefit Plan Summary Report