Freezing or terminating a defined benefit (DB) pension plan can have unforeseen implications for a company’s profit sharing plan. This is especially true if the plans are top-heavy or rely on IRS cross-testing methods (e.g., professional firm cash balance plans). This post explores changes to minimum profit sharing benefits that occur when plan sponsors freeze […]Read More… from Employers Need to Understand Minimum Profit Sharing Benefits for Frozen/Terminated DB plans
The IRS just announced the 2012 retirement plan benefit limits and we’re finally going to see some (very) modest increases after 3 years of flat rates. 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 […]Read More… from What’s the Impact of 2012 IRS Retirement Plan Limits?
We often hear the question “why should I contribute to a qualified retirement plan if tax rates might go up”? Good question; here’s why: you’ll probably end up with more money after tax. That’s true even if tax rates go up in the future. How much more you’ll end up with depends on your investment […]Read More… from The Value of Tax Deferral
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
If your 401(k) plan is failing the Actual Deferral Percentage (ADP) test, then it’s time to consider some plan design changes. You need to figure out a way to encourage non-highly compensated employees (NHCEs) to save more retirement money in their 401(k) accounts while keeping benefit costs under control. This post will guide plan sponsors […]Read More… from Strategic 401(k) Design: Preventing ADP Failures
The DOL recently announced an extension of the deadline for service providers to comply with Section 408(b)(2) regulations. These rules govern the disclosure of fees charged to qualified retirement plans (e.g., 401(k) and defined benefit pension plans). Disclosures were originally required by July 16, 2011, which has now been extended to January 1, 2012. The […]Read More… from Extension of Retirement Plan Fee Disclosure Deadline
Employers (large and small) will want to be aware of a provision included in a Senate jobs bill last week: the potential to allow eligible rollovers from a traditional 401(k) plan into a Roth 401(k) plan. Business Insurance has a good summary of some of the details, and here are some of the highlights: The […]Read More… from Roth 401(k) Rollover Changes
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
