IRS Notice 2011-85 announces the relief and postponed effective date for several items related to hybrid pension plans (e.g., cash balance and PEP plans). The notice is pretty technical (of course), but the IRS also published a nice summary of what’s affected by the relief. Here’s what it means for plan sponsors: The scope of […]Read More… from What’s Important for Plan Sponsors in IRS Hybrid Plan Notice 2011-85
Nonqualified deferred compensation plans are a common feature of executive pay packages. They’re a great choice in the right conditions, i.e. when: The executive’s share of company profits is very small, and The executive is willing to shoulder the employer’s credit risk, and Providing the benefits through a qualified plan would be too expensive. But […]Read More… from Deferred comp plans: when they’re a great choice, and when they’re not
Many successful companies (especially professional firms like medical groups and law firms) are considering whether to increase retirement plan deductions for 2011. This post highlights the action steps to take while there’s still time. Note: We’ll be focusing on cross-tested profit sharing plans and cash balance plans. These plans allow owners to make large tax-deferred […]Read More… from Now is the Time for Retirement Plan Decisions
The Federal Reserve’s “Operation Twist” is intended to boost consumer spending, but it could cause lots of problems for defined benefit pension plans who haven’t adopted a liability-driven investment (LDI) strategy. Here’s what plan sponsors need to consider: 1. If long-term interest rates drop due to “Operation Twist”, then pension liabilities will likely increase and […]Read More… from Fed’s “Operation Twist” Another Reason For Pension Plan LDI
In this post we highlight three new PBGC premium relief items: 1. Seven Day Rule – for waiver of late premium penalties in 2011 and later. 2. “Alternative” premium method election relief – for 2010 and later years. 3. Waiver of certain “alternative” method penalties – for 2008 and 2009. Below is a detailed summary […]Read More… from What’s New with PBGC Premium Relief
Over the past several years, GASB 45 has required public employers to recognize the cost of Other Postemployment Benefits (OPEB: e.g., retiree health insurance, life insurance) while employees are accruing the benefits, not after they retire. For many public entities, the true cost of their healthcare promises has been an eye opener. However, public employers […]Read More… from “Measure It Before You Promise It” for GASB 45 OPEB
There’s been a lot of discussion recently about whether the automatic enrollment feature in many 401(k) plans actually leads to lower overall retirement savings rates. This blog post gives a brief overview of the issue and proposes a couple of solutions to combat automatic enrollment inertia and enhance employee engagement in the retirement plan. Background: […]Read More… from Solutions to Prevent Automatic Enrollment Inertia
GASB 45 requires a complete actuarial valuation of public retiree health plans to be completed every 2 to 3 years (depending on number of plan members), and sponsors usually don’t look forward to the administrative hassles of their next study. However, there are several situations where a new valuation could be advantageous and, likely, mandatory. […]Read More… from Top Reasons to Change Your GASB 45 Valuation Schedule
Most large retirement plans don’t worry about the maximum pension deduction limit because the plan benefits (and related contributions) are often well below the IRS limits. However, small- and medium-sized retirement plans can unknowingly run into the limits. This post summarizes important deduction pitfalls to be aware of. Self-employment “earned income” limit [§404(a)(8)]. For self-employed […]Read More… from Common Retirement Plan Deduction Pitfalls
The IRS finally released the 2009 Form 8955-SSA used for reporting participants with deferred vested pension benefits. They also extended the deadline for the 2009 and 2010 filings from August 1, 2011 to January 17, 2012. Here are links to: 2009 Form 8955-SSA (fill-in the box version) Instructions for Form 8955-SSA Employee Plans News with […]Read More… from IRS Releases 2009 Form 8955-SSA and Extends Filing Due Date
