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
The IRS just announced the 2016 retirement plan benefit limits, and there are virtually no changes from 2015. What does it all mean for employer-sponsored retirement plans? Below is a table summarizing the primary benefit limits, followed by our analysis of the practical effects for both defined contribution (DC) and defined benefit (DB) plans. Qualified […]Read More… from What’s the Impact of 2016 IRS Retirement Plan Limits?
New Governmental Accounting Standards Board (GASB) statements 74 and 75 are intended to make accounting for OPEB (Other Postemployment Benefits, usually retiree medical) more transparent by moving the entire unfunded liability to the face of the financial statements. This post discusses some of the OPEB funding policy opportunities that employers should consider as they prepare […]Read More… from OPEB Funding Policy Opportunities
A thoughtful pension funding policy provides the best way for public sector employers to keep their pension promises. The funding policy provides discipline to address unfunded pension liabilities, while respecting the many current demands for budget dollars. The League of Arizona Cities and Towns recently sponsored a study by a special Task Force to identify […]Read More… from Developing a thoughtful public pension funding policy
Public sector employers, get ready! The Governmental Accounting Standards Board (GASB) has officially approved new accounting statements for Other Post-Employment Benefit plans (OPEB; retiree medical). Here’s what the recent GASB announcement confirms: Final provisions will closely mirror GASB 67/68 pension accounting. The official statements won’t be released until late June, but last summer’s OPEB exposure […]Read More… from First pensions, now OPEB – New GASB 74 & 75 will transform OPEB reporting
Over the past few years, many defined benefit (DB) plan sponsors considered lump sum payouts to their terminated vested participants as a way of “right-sizing” their plan. The ultimate goal is to reduce plan costs and risk. The IRS recently released the November 2014 417(e) rates, which will be the 2015 reference rates for many […]Read More… from Pension Lump Sums Much More Expensive in 2015
The combination of lower discount rates and new mortality tables will dramatically increase pension plan liabilities and decrease DB plans’ funded status for December 31, 2014 financial reporting. Using the November 2014 Citigroup Pension Liability Index (CPLI) and Citigroup Pension Discount Curve (CPDC) as proxies, pension accounting discount rates are down by almost 90 basis […]Read More… from DB Plan Sponsors Should Prepare Now for Higher Year-End Liabilities
The IRS just announced the 2015 retirement plan benefit limits and we’re seeing some modest increases from 2014. What does it all mean for employer-sponsored retirement plans? This post analyzes the practical effects for both defined contribution (DC) and defined benefit (DB) plans, followed by a table summarizing the limit changes. Changes affecting both DB […]Read More… from What’s the Impact of 2015 IRS Retirement Plan Limits?
Last week the Governmental Accounting Standards Board (GASB) released its long-awaited exposure draft of proposed Other Post-Employment Benefits (OPEB) accounting changes. Although there may be modifications before the rules are finalized, public employers should be aware of the potential consequences. Here’s our list of the top 5 items from the exposure draft: 1. Most of […]Read More… from Top 5 Take-Aways from the GASB OPEB Accounting Exposure Draft
“Every state and local government that offers defined-benefit pensions [should] formally adopt a funding policy…,” according to the Government Finance Officers Association (GFOA) best practice recommendations. Guidelines for Funding Defined Benefit Pensions (2013) (CORBA) SOA and GASB Provide Guidance Blue Ribbon Panel. Last month, a blue ribbon panel formed by the Society of Actuaries went […]Read More… from Public Pension Plan Funding Policy – The Time is Here
