We’ve been waiting quite a while for some official guidance on many of the technical issues involved with cash balance and other hybrid retirement plans. Last week we received final regulations for some issues, and proposed regulations for others. This post focuses on what constitutes a Market Rate of Return. A brief recap: typically a […]Read More… from Final Hybrid Plan Regs: Market Rate of Return
We’re starting to see a lot of interest from prospective cash balance plan (CBP) clients as we march towards the end of 2010. Small and midsize businesses are attracted to the large retirement deduction opportunities of CBPs. After explaining the technical details of these plans, prospective clients invariably ask the question: What are the fees […]Read More… from Cash Balance Plan Fees
One of the advantageous provisions of the Pension Protection Act (PPA) is that it removed some technical obstacles limiting the ability of certain plan sponsors to make large deductible contributions to their defined benefit (DB) and defined contribution (DC) retirement plans. The issue in question is the overall “25% of compensation” limit which is intended […]Read More… from Paying for PBGC coverage
A recent article by Vanguard addresses the apparent tradeoff of interest rate risk for investment risk when converting a traditional pension plan to a cash balance pension plan. A couple of quick thoughts on this topic: This is likely true for a traditional corporate pension plan where the plan sponsor has to worry about the […]Read More… from Cash Balance Plan Investment Risk
Cash balance plans can serve a multitude of purposes in partnerships and similar firms. We traditionally see them as retirement tools that allow shareholders to make very large tax-deductible retirement contributions while at the same time providing meaningful benefits to their employees. In this standard scenario, each individual partner is generally responsible for funding their […]Read More… from Cash Balance Plans as Buy-Out Tools
One of the hurdles that business owners face when exploring a cash balance plan is deciding whether the cost of the plan justifies the cash balance deduction opportunities. It is a bit of a balancing act, but this post will review one such cost: the IRS “gateway contribution” for cross-tested cash balance plans. The IRS […]Read More… from Cash Balance Gateway Contributions
As we’ve mentioned in previous posts, there has been a lot of press this year about cash balance plans and how they can provide great retirement deferral opportunities for certain types of plan sponsors: law firms, physicians groups, and small employers. However, there is the occasional case of buyer’s remorse with these plans so I […]Read More… from Cash Balance Plans: Eyes Wide Open
