The Small Business Jobs Act of 2010 (H.R. 5297) passed the Senate last week and is expected to be signed into law by the President. As we mentioned in a previous post, there are a couple of retirement plan changes included in this bill. They include: – Add a Roth option for 457(b) plans. This [...]
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 [...]
The IRS/SSA Reporter newsletter (Fall 2010, page 2) provides some preliminary details regarding the new Form 8955-SSA which will be used by employer-sponsored retirement plans to report participants with deferred vested benefits. This new filing is effective for 2009 plan years and replaces the Form 5500 Schedule SSA. Some highlights from the newsletter: There will [...]
Employers (large and small) will want to be aware of a provision included in a Senate jobs bill last week: the potential to allow eligible rollovers from a traditional 401(k) plan into a Roth 401(k) plan. Business Insurance has a good summary of some of the details, and here are some of the highlights: The [...]
A quick update on the Early Retiree Reinsurance Program (ERRP): Over the past few months, the Department of Health and Human Services (HHS) has been busy gearing up for the implementation of the ERRP. As you may recall from our earlier posts (1, 2, 3), this is a program that’s part of the larger healthcare [...]
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 [...]
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 [...]
