Almost every employer-sponsored retirement plan (whether it’s a pension plan or a 401(k) plan) must satisfy certain nondiscrimination tests set forth in the internal revenue code. The IRS mandates these tests to ensure that if an employer is getting retirement plan tax deductions, then the plan should be designed so that benefits are not skewed […]Read More… from Passing the §401(a)(26) “meaningful benefit” test
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
Just ran across this, in Consumer Reports of all places. It’s about the new DB(k) plan, a 401(k)/defined benefit combo that came in as part of the Pension Protection Act of 2006 (PPA), first available in 2010. We’ve never thought the DB(k) would have much appeal, but what do we know? I thought cash balance […]Read More… from The new DB(k) plan
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
Yet another article on the growing popularity of cash balance plans was featured on the front page of Yahoo! finance this morning. It’s a bit of a generic overview, but gets the point across. One thing to note: the article states that annual interest crediting rates in these plans are guaranteed rates such as 4%, […]Read More… from More cash balance plan press coverage
During the recent economic recession, many pension plan sponsors have either been forced to shut facilities/plants or have experienced rounds of layoffs which reduced the number of active participants in the pension plan. As many pension plan sponsors know, a significant drop in the number of active participants can trigger a PBGC “reportable event.” This […]Read More… from Surprise, You’ve Got a PBGC Reportable Event
I’ve been amazed at how many times this little tidbit about the popularity of cash balance plans has appeared and reappeared in the news. That’s great, because many employers and financial planners are still unaware of what’s possible. It makes sense that a big surge has come since 2001. That was just after the […]Read More… from Cash balance plan surge
