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 […]
By Mark Schulte
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Posted in Cash balance plans, Defined benefit plans, PBGC, Private pensions
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Also tagged funded status, interest rate stabilization, MAP-21, PBGC, pension, pension plan, pension relief, qualified plans, qualified retirement plan
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January 30, 2013 – 4:54 pm
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 […]
October 18, 2012 – 1:43 pm
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 […]
By Mark Schulte
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Posted in 401(k) plan, Cash balance plans, Defined benefit plans, Defined contribution plans, Private pensions, profit sharing plan, Public pensions
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Also tagged 401(k), 401(k) plan, pension, pension plan, profit sharing plan, qualified plans, qualified retirement plan, retirement deduction
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November 9, 2011 – 8:44 am
Freezing or terminating a defined benefit (DB) pension plan can have unforeseen implications for a company’s profit sharing plan. This is especially true if the plans are top-heavy or rely on IRS cross-testing methods (e.g., professional firm cash balance plans). This post explores changes to minimum profit sharing benefits that occur when plan sponsors freeze […]
By Mark Schulte
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Posted in 401(k) plan, Cash balance plans, Defined benefit plans, Defined contribution plans, Private pensions, profit sharing plan
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Also tagged cross testing, nondiscrimination, pension, pension plan, plan termination, profit sharing plan, qualified plans
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October 20, 2011 – 11:53 am
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 […]
By Mark Schulte
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Posted in 401(k) plan, Cash balance plans, Defined benefit plans, Defined contribution plans, Private pensions, profit sharing plan, Public pensions
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Also tagged 401(k), 401(k) plan, pension, pension plan, profit sharing plan, qualified plans, qualified retirement plan, retirement deduction
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October 13, 2011 – 9:29 am
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 […]
October 7, 2011 – 7:45 am
Many successful companies (especially professional firms like medical groups and law firms) are considering whether to increase retirement plan deductions for 2011. This post highlights the action steps to take while there’s still time. Note: We’ll be focusing on cross-tested profit sharing plans and cash balance plans. These plans allow owners to make large tax-deferred […]
September 23, 2011 – 8:14 am
The Federal Reserve’s “Operation Twist” is intended to boost consumer spending, but it could cause lots of problems for defined benefit pension plans who haven’t adopted a liability-driven investment (LDI) strategy. Here’s what plan sponsors need to consider: 1. If long-term interest rates drop due to “Operation Twist”, then pension liabilities will likely increase and […]
Most large retirement plans don’t worry about the maximum pension deduction limit because the plan benefits (and related contributions) are often well below the IRS limits. However, small- and medium-sized retirement plans can unknowingly run into the limits. This post summarizes important deduction pitfalls to be aware of. Self-employment “earned income” limit [§404(a)(8)]. For self-employed […]
The IRS finally released the 2009 Form 8955-SSA used for reporting participants with deferred vested pension benefits. They also extended the deadline for the 2009 and 2010 filings from August 1, 2011 to January 17, 2012. Here are links to: 2009 Form 8955-SSA (fill-in the box version) Instructions for Form 8955-SSA Employee Plans News with […]
