We often hear the question “why should I contribute to a qualified retirement plan if tax rates might go up”? Good question; here’s why: you’ll probably end up with more money after tax. That’s true even if tax rates go up in the future. How much more you’ll end up with depends on your investment [...]
Nonqualified deferred compensation plans are a common feature of executive pay packages. They’re a great choice in the right conditions, i.e. when: The executive’s share of company profits is very small, and The executive is willing to shoulder the employer’s credit risk, and Providing the benefits through a qualified plan would be too expensive. But [...]
We all knew this day would come, and now it’s here. New applications for the Early Retiree Reinsurance Program (ERRP) will be received only until 5 pm on Thursday, May 5th. The last time we blogged about this, the ERRP money was going fast. Now the urgency is clear. So if you’ve been thinking about [...]
In our last ERRP post, we noted that $1 billion of the original $5 billion in Early Retiree Reinsurance Program (ERRP) funds has been paid out. Now, according to an article this week in Business Insurance, the US Dept of Health and Human Services (HHS) estimates that $3.6 billion will have been paid out in [...]
$1 billion of the original $5 billion has now been paid out under the Early Retiree Reinsurance Program (ERRP), according to an article this month in Business Insurance. We’ve been watching the ERRP since its inception (posts 1, 2, 3, 4), and didn’t think the $5 billion allocation would last long. A July 2010 EBRI [...]
The IRS just published the retirement plan limits for 2011. Most of the limits for retirement plans are unchanged – again. They’re the same as 2009 and 2010: Maximum annual pension plan benefit $195,000 Maximum annual addition for defined contribution plans 49,000 Maximum 401(k) elective deferral 16,500 Maximum catchup contribution (age 50 and over) 5,500 [...]
This just in: President Obama signed the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act today. Title I of the Act is about Medicare physician reimbursements, and Title II is about pension funding relief. The funding relief is in the form of extended shortfall amortization periods. Employers who choose to can [...]
We’ve been blogging lately on technical cash balance plan topics like meaningful benefits and fixing test failures. But we’ve been light on basics. You can see a basic cash balance plan explanation on our website: what they are, when they’re a good fit, and a simple example. That should relieve any brain cramps from the [...]
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 [...]
Last week, the HHS published an interim final rule for the new Early Retiree Reinsurance Program (should we call it ERRP?). In our first post on this, we noted that a lot was still unknown. There still is, but it’s becoming clearer. The White House fact sheet says “Employers can use the savings to either [...]
