Small Closed DB Plans Need to Monitor §401(a)(26) Status

In last week’s blog post covering nondiscrimination testing pitfalls for soft-frozen pension plans, we discussed how defined benefit (DB) plans that are closed to new participants can run afoul of the IRC §410(b) minimum coverage rules. Today’s post discusses how small DB plans closed to new entrants can also have difficulties passing the IRC §401(a)(26) […]Read More… from Small Closed DB Plans Need to Monitor §401(a)(26) Status

Beware Nondiscrimination Pitfalls for Frozen Pension Plans

Many defined benefit (DB) pension plans were closed to new entrants over the past several years. Oftentimes, these plan closures were done with a focus on short-term cost control without understanding some of the long-term compliance implications. Then, one day, the plan sponsor gets an unwelcome surprise from their actuary – their DB plan is […]Read More… from Beware Nondiscrimination Pitfalls for Frozen Pension Plans

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