What’s Important for Plan Sponsors in IRS Hybrid Plan Notice 2011-85

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

Strategic 401(k) Design: Preventing ADP Failures

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

Explanation of 436 and Hybrid Plan Amendment Extensions

As we speculated a few weeks ago, the IRS has extended the deadline for plan sponsors to amend their plan documents to comply with certain law changes under PPA and WRERA. Notice 2010-77 essentially just adds a year to the previously extended deadlines from Notice 2009-97. These extensions may be a moot point for many […]Read More… from Explanation of 436 and Hybrid Plan Amendment Extensions

Possible 436 Amendment Extension

Nothing’s official yet, but there are rumors circulating in the benefits community that the IRS may extend the deadline for amending defined benefit pension plan documents for the IRC 436 benefit restriction rules. So, what’s the practical implication for pension plan sponsors? Perhaps not much. Many plan documents were already amended late in 2009 since […]Read More… from Possible 436 Amendment Extension

To Freeze or Not to Freeze (A Pension Plan)

Freezing a defined benefit (DB) pension plan has become common practice over the past decade. Plan sponsors give many reasons for freezing the DB plan, but one of the most common is that the funding requirements are too expensive and volatile. In a recent article, two actuaries from Milliman dissected a sample pension freeze and […]Read More… from To Freeze or Not to Freeze (A Pension Plan)

Fixing a §401(a)(4) test failure

Our philosophy for coverage and nondiscrimination testing has always been “everything passes, some plans just take a little longer to prove it”. That was put to the test recently for one of our law firm clients:  an unusually young new partner was causing their  §401(a)(4) nondiscrimination test to fail.  We emptied the whole toolbox on […]Read More… from Fixing a §401(a)(4) test failure