A while back I read a blog post titled “The Beer Napkin Annuity” (BNA) that I found intriguing (if nothing else, the name is catchy). The basic premise was that perhaps we could adjust our retirement tax deduction rules to transfer some deduction opportunities traditionally reserved for defined benefit (DB) plans to defined contribution (DC) [...]
It was a bit of a longshot to begin with, but the American Benefits Council’s proposal for a blanket extension for filing of 2009 Forms 5500 until December 31, 2010 (or 9 1/2 months after the end of the plan year, if later) was recently rejected by the DOL. As the DOL mentions in their [...]
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 [...]
Earlier this year, the Department of Labor and the Treasury put out a Request for Information (RFI) on lifetime income options for retirement plans. Last week was the deadline, and they got some great responses. My favorite is from the American Academy of Actuaries. Not surprising, since I’m an actuary. But they pointed out something [...]
A Congressional proposal has been introduced that would “severely reduce the attractiveness of cross-tested plans” according to the American Society of Pension Professionals & Actuaries. Cross-tested plans can be used to provide different defined contribution allocations to different groups of employees. Often cash balance plans are aggregated with a defined contribution plan and cross-tested for [...]
Just ran across this, in Consumer Reports of all places. It’s about the new DB(k) plan, a 401(k)/defined benefit combo that came in as part of the Pension Protection Act of 2006 (PPA), first available in 2010. We’ve never thought the DB(k) would have much appeal, but what do we know? I thought cash balance [...]
I’ve been amazed at how many times this little tidbit about the popularity of cash balance plans has appeared and reappeared in the news. That’s great, because many employers and financial planners are still unaware of what’s possible. It makes sense that a big surge has come since 2001. That was just after the [...]
