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
Each year, defined benefit (DB) pension plan sponsors must pay pension insurance premiums to the Pension Benefit Guaranty Corporation (PBGC). In light of large PBGC premium rate increases in 2013 and future years, plan sponsors should carefully evaluate their options before proceeding with their next premium payment. Background There are two components to annual PBGC […]Read More… from Evaluating PBGC Premium Options in Advance of Big Increases
In what has become an annual rite of winter, the PBGC recently released PBGC Technical Update 13-1 extending relief from the proposed amendments to the reportable events regulations for certain small pension plans. However, unlike previous years’ relief, the new technical update provides guidance for all plan years after 2012 (or until new proposed or […]Read More… from Déjà Vu All Over Again: PBGC Extends Reportable Event Relief for 2013 and Beyond
Pension discount rates continued to drop during 2012 and plan sponsors should prepare for yet another potential upward spike in balance sheet liabilities for the fiscal year ended December 31, 2012. Using the Citigroup Pension Liability Index (CPLI) and Citigroup Pension Discount Curve (CPDC) as proxies, pension accounting discount rates may decrease by roughly 35 […]Read More… from Expect Lower Discount Rates (and Higher Liabilities) for 2012 Pension Disclosures
The IRS just announced the 2013 retirement plan benefit limits and we’re seeing some modest increases from 2012. 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 summarizing the limit changes. Changes affecting both DB […]Read More… from What’s the Impact of 2013 IRS Retirement Plan Limits?
Pension discount rates have plummeted over the past few months and plan sponsors should prepare for a potential upward spike in balance sheet liabilities for the fiscal year ended December 31, 2011. Using the Citigroup Pension Discount Curve (CPDC) as a proxy, pension accounting discount rates could decrease by 100 basis points (or more). This […]Read More… from Low Pension Discount Rates = Big Accounting Liabilities for FY2011
Almost a year to the day after providing relief for the 2011 plan year, the PBGC released PBGC Technical Update 11-1. This notice provides guidance for the 2012 plan year on how to comply with the proposed amendments to the reportable events regulations. Summary of Important Guidance Similar to the prior pronouncements, the new Technical […]Read More… from Déjà vu: PBGC Extends Reportable Event Relief for 2012
The IRS recently released the October interest rates for pension plans. What do they hold in store for plan sponsors? This post summarizes some of the important rates along with our observations. Funding Segment Rates The interest rates used to determine pension plan liabilities for IRS funding purposes are composed of three segment rates (unless […]Read More… from Plan Sponsors Should Prepare Now for 2012 Pension Interest Rates
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?
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
