Cash Balance Pension Plans Retirement Savings on Steroids. Brief History of Cash Balance Plans

Size: px
Start display at page:

Download "Cash Balance Pension Plans Retirement Savings on Steroids. Brief History of Cash Balance Plans"

Transcription

1 Cash Balance Pension Plans Retirement Savings on Steroids Luke Bailey Brad Oxford Brief History of Cash Balance Plans Devised in 1980 s primarily as a way for large company defined benefit plans to provide benefits that were: More understandable More highly valued by younger employees Cheaper to provide to older employees More predictable costs for employers 1

2 Brief History of Cash Balance Plans Became mired in controversy and litigation for next 20 years Many lawsuits brought, with varying success, primarily based on claims of age discrimination + Financial value of accruals can be viewed as declining over employee s career + Conversions with wearaway produced accrual holidays for older, longer service employees + Inadequate notice regarding complex effect of conversions arguably resulted in violations of ERISA 204(h) notice requirements Brief History of Cash Balance Plans Internal Revenue Code and IRS regulations regarding defined benefit plans did not really contemplate cash balance plans, so compliance with technical rules applicable to defined benefit plans not clear + Requirement to pay lump sums based on conversion of pension annuity at normal retirement age (NRA) using rules of IRC 417(e)(3) led to whipsaw problem + Some plan designs violated anti-backloading rules of IRC Some plan sponsors introduced investment-sensitive accruals and even self-directed investments which challenged traditional notions of what definitely determinable benefits meant (See Treas. reg (b)(1)(i)) 2

3 Brief History of Cash Balance Plans The Pension Protection Act of 2006 resolved, overall in a favorable way, most of the outstanding issues and uncertainties regarding cash balance plans: Legitimized cash balance form of accrual as type of defined benefit plan (See IRC 411(a)(13)) Can pay notional account balance as lump sum, avoiding IRC 417(e)(3) whipsaw calculation No age discrimination problem as long as interest crediting rate not greater than market rate of return (See IRC 411(b)(5)) Paved way for IRS regulations allowing accruals to vary with investment returns Introduced A + B (no wearaway) protection for conversions of traditional DB plans (See IRC 411(b)(5)(B)(ii)) DC vs. DB Split The IRC 401(a) qualified plan world is divided into two provinces: Defined contribution (DC) plans (today, chiefly 401(k) plans with or without nonelective, often cross-tested, employer contributions) (See IRC 414(i)) Defined benefit (DB) pension plans (today, usually found only at governmental employers or large companies, where often frozen and underfunded) (See IRC 414(j)) There are also hybrids (See IRC 414(k) and new 414(x)) Cash balance plans are often referred to as hybrid plans, but they are actually DB plans that resemble DC plans 3

4 Nature of DC Plan In a DC plan, each participant has an account to which are (a) credited the actual contributions made by the employer and/or employee and investment earnings and gains on such contributions and previous earnings and gains, and (b) debited any investment losses; the Participant s benefit is simply his/her account Example of DC Plan Benefits and Funding Year Beginning Assets Contribution Investment Return Ending Assets Plan Liabilities Year 1 $1,000,000 $100,000 10% $1,200,000 $1,200,000 Year 2 $1,200,000 $100,000 8% $1,396,000 $1,396,000 Year 3 $1,396,000 $100,000 12% $1,663,520 $1,663,520 Year 4 $1,663,520, $100,000 10% $1,929,872 $1,929,872 Year 5 $1,929,872 $100,000-20% $1,643,898 $1,643,898 Nature of DC Plan Contributions to a DC plan typically vary from year to year based on employee and employer decisions The benefit equals the account balance, so plan assets always equal benefit liabilities Participants often given control over investments of their own account Benefit usually payable only as lump sum 4

5 Nature of Traditional DB Plan In a traditional DB plan, a participant s benefit is an annuity payable in retirement and determined by a formula that typically takes into account the employee s annual pay and years of service, e.g. Plan benefit = life annuity commencing at age 65 the amount of which is determined by multiplying 2% times the employee s average annual pay over last three years of service If employee has 20 years of service and average annual pay of $100,000 in last three years of service, pension would be life annuity of $40,000 per year ([20 years of service x 2% per year of service] x $100,000) Nature of Traditional DB Plan The benefit amount is a contractual promise independent of the return on plan investments; this is why benefits are called plan liabilities Until retirement, employee s benefit is only a complex promise (an algebraic formula), not tangible like an account The portion of the benefit attributable to each year s service is not subject to discretion, although may be changed for future years by amendment, or plan may be frozen Minimum funding rules of Code and ERISA require employer to make up investment losses so that plan is adequately funded to pay promised benefits (See IRC 412 and 430) 5

6 Nature of Traditional DB Plan The greatest single reason why DB plans in general have grown unpopular is the underfunding problem, i.e. the substantial risk that a traditional DB plan s assets will fall below its liabilities, placing a substantial burden on plan sponsor Example: Assume DB plan with $1,000,000 in assets and liabilities at beginning of Year 1; employer contribution to cover benefits accruing during year ( normal cost ) is $100,000 per year; Plan s assumed interest rate for funding purposes is 7%; and rate of return on assets is as shown below Nature of Traditional DB Plan 6

7 Nature of Traditional DB Plan In other words, in traditional DB plan, liabilities always increase, based on assumed actuarial interest rate, but asset values may decrease in down market, creating underfunding, which essentially creates a balance sheet liability for employer, with no corresponding asset The more mature the plan, the larger the potential amount of any investment loss relative to current contributions What is a Cash Balance Plan? A cash balance plan is a DB plan that has features that make it look like a DC plan Participants have notional accounts Benefit expressed not by formula, but rather as balance of a notional account 7

8 What is a Cash Balance Plan? Example of Cash Balance Plan Benefit: Each year a pay credit of 2% of pay is made to a participant s notional account and the account s accumulating balance is also credited with interest of 4% per year; benefit at any time (e.g., retirement at age 65, or separation from service at age 30) is the notional account balance, payable as a lump sum Year Pay Pay Credit Interest Credit Notional Account Balance 1 $50,000 $1,000 NA $1,000 2 $55,000 $1,100 $40 $2,140 3 $55,000 $1,100 $86 $3,326 4 $58,000 $1,160 $133 $4,619 5 $60,000 $1,200 $185 $6,004 What is a Cash Balance Plan? In the above example: The employee s benefit is the cash balance shown in the far right column + It s exactly what he or she would be paid if he or she received his or her benefit today + Its current monetary value is obvious to employee The annual growth in the employee s benefit is based on an easy to understand account model rather than a complicated algebraic formula Notice that, as in a DC plan, the employee s benefit is determined by his or her pay history and years of plan participation; it is independent of his or her age + Early years (presumably lower paid), because they accrue more interest, have a heavier weight in calculating ending benefit than final years of higher pay, the reverse of a traditional DB plan 8

9 What is a Cash Balance Plan? Example of impact of age in traditional DB plan Assume DB plan promises a retirement annuity paying annual benefit of 2% of pay per year of service, that plan s assumed interest rate for actuarial equivalence is 6% per year, and that the annuity purchase rate (APR) is 10 (i.e., the lump sum amount needed to purchase a life annuity at age 65 is 10x the annual benefit amount) The costs of funding one year s accrual for 25-year-old and 64- year-old participants, each earning $50,000 in annual pay, are determined as follows: 25-year-old: $50,000 x 2% = $1,000; $1,000 x 10 = $10,000; $10,000/1.06⁴º = $ year-old: $50,000 x 2% = $1,000; $1,000 x 10 = $10,000; $10,000/1.06¹ = $9,434 What is a Cash Balance Plan? Unless a cash balance plan s factors are purposely weighted to benefit an older participant, the cash balance plan s cost to employer is insensitive to employee s age No disincentive to hiring older workers No special incentive to older workers to hang on to job However, large employers will often choose to apply larger pay credits to workers with more years of service to mitigate effect of age neutrality, and smaller employers often will want to weight the plan s factors to favor older owners 9

10 Why Are Cash Balance Plans So Popular Now Among Small- and Medium-Size Private Companies? There were 9,648 cash balance plans at end of 2012, the most recent year for which there is current data, up from 7,926 at end of 2011, a 22% annual growth rate (Kravitz 2014 National Cash Balance Plan Research Report) PPA 2006 removed uncertainty IRS regs under PPA 2006 permit designs in which benefits track assets, including tracking assets down in down markets, making it possible for employers to shift investment risk to employees and avoid risk of underfunding Because cash balance plans are DB plans, much larger annual contributions are possible than with DC plans Why Are Cash Balance Plans So Popular Now Among Small- and Medium-Size Private Companies? PPA removed all lingering doubt regarding whether it was possible to base a defined benefit plan on a notional account benefit, and also banished most technical obstacles: Created new account based benefit category of DB plan (See IRC 411(a)(13)) Account balance can be paid as lump sum without whipsaw (See IRC 411(a)(13)(A)(ii)) Path cleared for compliance with age discrimination rules (See IRC 411(b)(5)) Code s market rate of return requirement paved way for IRS regulations permitting negative adjustments to benefits in down markets (See IRC 411(b)(5)(B)(i)(III)) In return, PPA requires Faster vesting (100% after three years) (See IRC 411(a)(13)(B)) Compliance with new market rate of return rules (See IRC 411(b)(5)(B)(i)(I)) A + B benefit calculation rules for cash balance conversions (See IRC 411(b)(5)(B)(iii)) 10

11 Why Are Cash Balance Plans So Popular Now Among Small- and Medium-Size Private Companies? Under 2010 IRS regulations (Treas. reg (b)(5)-1(d)), a cash balance plan may base plan benefits (and, therefore, liabilities) on any of several market based indexes, including indexes that are variable (e.g., annual CPI, or various Treasury rates) and even indexes that can have negative rates of return, e.g. the S&P 500 index or, to match liabilities and assets even more closely, the actual rate of return on plan assets, as long as the assets are properly diversified under ERISA However, unless a variable annuity design is used, plan must provide for return of capital under which participant s benefit is not permitted to fall below arithmetic sum of pay credits (Treas. reg (b)(5)-1(d)(2)) Variable annuity plan adjusts plan benefit each year by rate of return on plan assets compared with an assumed hurdle rate (Treas. reg (a)(13)-1(d)(b)) + Some uncertainty as to what designs fall into variable annuity category Why Are Cash Balance Plans So Popular Now Among Small- and Medium-Size Private Companies? Example: Cash balance plan (not a variable annuity plan) provides for interest credits equal to the rate or return on plan assets. Assume aggregate actuarial liability of pay credits and rate of return on plan assets is as shown below Year Beginning Assets Pay Credits Employer Contribution Rate of Return Liabilities Return of Capital Floor Ending Assets Year 1 $1,000,000 $100,000 $100,000 10% $1,200,000 $1,100,000 $1,200,000 Year 2 $1,200,000 $100,000 $100,000 8% $1,396,000 $1,200,000 $1,396,000 Year 3 $1,396,000 $100,000 $100,000 12% $1,663,520 $1,300,000 $1,663,520 Year 4 $1,663,520 $100,000 $100,000 10% $1,929,872 $1,400,000 $1,929,872 Year 5 $1,929,872 $100,000 $100,000-20% $1,643,898 $1,500,000 $1,643,898 Note: In this example, loss could have been as much as 27% before employer would have been at risk to increase contributions under return of capital rule 11

12 Why Are Cash Balance Plans So Popular Now Among Small- and Medium-Size Private Companies? Because it s a DB plan, the individual limits on contributions are much higher than for a DC plan 2014 DC Section 415(c) limit on annual contributions for individual is $52,000, or $57,500 with age 50 catch up 2014(b) DB limit on annual individual benefits is $210,000 Comparing DB limit on benefits to DC limit on contributions is apples to oranges, so let s convert DB limit to contributions Example: Assume company has not previously sponsored a DB plan and owner age 55 wants to retire at age 65 with maximum benefit. Assume APR of 10 and assumed earnings of 5% per year. Account Balance needed at age 65 = $2,100,000 ($210,000 x 10). Annual deductible contribution needed to fund benefit = $167,000 Why Are Cash Balance Plans So Popular Now Among Small- and Medium-Size Private Companies? In other words, for a 55-year-old business owner the amount he or she can contribute and deduct in a cash balance plan is roughly 3X what he or she can contribute and deduct to DC Moreover, the Section 415(e) DB/DC combined limit was repealed in 1996 (effective in 2000), so business owner can receive both DB contribution as a DC benefit if can afford contributions 12

13 Why Are Cash Balance Plans So Popular Now Among Small- and Medium-Size Private Companies? Cash balance plans can use the same new comparability actuarial rules for nondiscrimination testing as defined contribution plans (e.g., cross-tested profit sharing plans) (See Treas. reg (a)(4)-8) In other words, using an assumed interest rate of 8.5%, a pay credit of $3,827 for a 25-year-old is treated as equivalent to a $44,230 pay credit for a 55-year-old But if this were a DC plan, that s about what you d get, or likely less because the $57, (c) limit would be reduced first by 401(k) and possibly matching contributions, e.g. to $30,000 With a cash balance plan, you could scale up roughly by factor of 4 or 5, in other words, $15,308 for the 25-year-old and $176,920 for 55-year-old This is before employing other new comparability tricks of trade, i.e., permitted disparity (i.e., for social security) and average benefits testing + A typical new comparability design would be to have NHCEs in DC plan with 7.5% nonelective gateway contribution and cover only owners in cash balance plan (but see IRC 401(a)(26) caveat below) But it is a DB Plan Need an actuary to make annual calculations and file reports PBGC premiums unless non-erisa (church, governmental, or only self-employeds covered), or professional firm and plan never covers or covered more than 25 participants 2014 per participant flat rate PBGC premium $49 No variable rate premium if no underfunding Section 401(a)(26) requires that DB plan, including a cash balance plan, cover lesser of 40% of employee population or 50 individuals 13

14 Gray Area Between Employer Design Decisions and Employee Elections Treas. Reg (k)-1 prohibits individual cash or deferred elections outside of 401(k) plans Many cash balance plans will cover some, but not all, HCEs, e.g. will cover the older owners of a professional business, but not younger, which provides juice for new comparability testing Getting this done without violating rule against cash or deferred elections outside 401(k) s can be tricky + For sure cannot make frequent individual changes, e.g. yearto-year + Difference between election and non-anonymous survey? + Formula that indirectly takes into account predicted compensation > 401(a)(17) limit? Remember! As with all qualified retirement plans: Contributions are immediately deductible and benefits are not taxable until retirement Contributions and distributions escape FICA (e.g., the 2 x 1.45% = 2.9% employee and employer HI tax) and the 0.9% additional medicare tax on high earning employees or self-employed Contributions, trust, earnings, and distributions escape 3.8% investment tax Benefit payments are eligible for rollovers (including Roth rollovers) at retirement Benefits are fully protected from creditors, even in bankruptcy, and even after rollover to traditional or Roth IRA 14

15 In Conclusion All qualified plans are good (see previous slide) A cash balance plan is a qualified plan on steroids 15

Overview of Hybrid Plans (Cash Balance and Pension Equity Plans)

Overview of Hybrid Plans (Cash Balance and Pension Equity Plans) Overview of Hybrid Plans (Cash Balance and Pension Equity Plans) By: Al Reich Reviewers: Steve Klubock, Anita Bower, and Bill Anderson Overview INTERNAL REVENUE SERVICE TAX EXEMPT AND GOVERNMENT ENTITIES

More information

Cash Balance Plan Overview

Cash Balance Plan Overview Cash Balance Plan Overview A Cash Balance Plan is a type of qualified retirement plan that is a hybrid between a traditional Defined Contribution Plan and a traditional Defined Benefit Plan. Like traditional

More information

EXPLANATION OF PEP PLAN ISSUES

EXPLANATION OF PEP PLAN ISSUES EXPLANATION OF PEP PLAN ISSUES Introduction Pension Equity Plans (PEPs), or more properly PEP formulas, provide for a benefit defined as an accumulated percentage of pay. PEP formulas often closely resemble

More information

New Comparability Plan

New Comparability Plan Raymond James John Dulay Financial Advisor 550 W. Washington Blvd. Suite 1050 Chicago, IL 60661 312-869-3889 888-711-4301 John.Dulay@raymondjames.com www.truenorthretirementpartners.com New Comparability

More information

Synopsis of Qualified Retirement Plan Options

Synopsis of Qualified Retirement Plan Options Synopsis of Qualified Retirement Plan Options 401(k) Salary Deferral Only No contribution cost for employer Subject to ADP non- discrimination test under 401(k) o Failure of test means highly compensated

More information

PLAN SPONSOR BASICS: CASH BALANCE PLANS. Presenters: John Ferreira and Jared Rogers March 31, 2015. 2015 Morgan, Lewis & Bockius LLP

PLAN SPONSOR BASICS: CASH BALANCE PLANS. Presenters: John Ferreira and Jared Rogers March 31, 2015. 2015 Morgan, Lewis & Bockius LLP PLAN SPONSOR BASICS: CASH BALANCE PLANS Presenters: John Ferreira and Jared Rogers March 31, 2015 2015 Morgan, Lewis & Bockius LLP Overview of Today s Training Introduction to Cash Balance Plans Brief

More information

What is a Qualified Plan?

What is a Qualified Plan? Manning & Napier Advisors, LLC What is a Qualified Plan? January 2012 Approved CAG-CM PUB035 (1/12) Oftentimes, descriptions of what makes a retirement plan a qualified retirement plan are far too general.

More information

PRESENT LAW AND BACKGROUND RELATING TO EMPLOYER-SPONSORED DEFINED BENEFIT PENSION PLANS AND THE PENSION BENEFIT GUARANTY CORPORATION ( PBGC )

PRESENT LAW AND BACKGROUND RELATING TO EMPLOYER-SPONSORED DEFINED BENEFIT PENSION PLANS AND THE PENSION BENEFIT GUARANTY CORPORATION ( PBGC ) PRESENT LAW AND BACKGROUND RELATING TO EMPLOYER-SPONSORED DEFINED BENEFIT PENSION PLANS AND THE PENSION BENEFIT GUARANTY CORPORATION ( PBGC ) Scheduled for a Public Hearing Before the SENATE COMMITTEE

More information

A Lesson in Qualified Retirement Plans

A Lesson in Qualified Retirement Plans A Lesson in Qualified Retirement Plans Since salary alone is often not enough to attract and retain valued employees, how can your business use a qualified retirement plan to enhance its employee benefits

More information

SOA 2010 Annual Meeting & Exhibit Oct. 17-20, 2010. Session 118 PD, Statutory Hybrid Plans. Moderator: Ellen L. Kleinstuber, ASA, EA, FCA, MAAA, MSPA

SOA 2010 Annual Meeting & Exhibit Oct. 17-20, 2010. Session 118 PD, Statutory Hybrid Plans. Moderator: Ellen L. Kleinstuber, ASA, EA, FCA, MAAA, MSPA SOA 2010 Annual Meeting & Exhibit Oct. 17-20, 2010 Session 118 PD, Statutory Hybrid Plans Moderator: Ellen L. Kleinstuber, ASA, EA, FCA, MAAA, MSPA Presenters: David R. Godofsky, FSA, EA, FCA, MAAA Sarah

More information

Pension Protection Act of 2006 Makes Significant Changes to Single Employer Defined Benefit Plans

Pension Protection Act of 2006 Makes Significant Changes to Single Employer Defined Benefit Plans Important Information Legislation November 2006 Pension Protection Act of 2006 Makes Significant Changes to Single Employer Defined Benefit Plans This is one of a series of Pension Analyst publications

More information

CRS Report for Congress

CRS Report for Congress December 3, 2007 CRS Report for Congress Lump-Sum Distributions under the Pension Protection Act Summary Patrick Purcell Specialist in Income Security Domestic Social Policy Division The Pension Protection

More information

Preventing Disastrous DB Distributions Sunday, April 28, 2013

Preventing Disastrous DB Distributions Sunday, April 28, 2013 Preventing Disastrous DB Distributions Sunday, April 28, 2013 David B. Farber, ASA, COPA, EA, MSPA Defined Benefit Distributions Participant must elect form of benefit prior to payment from plan Types

More information

The Business Planning Group Inc. Retirement Planning Guide 2015 Edition

The Business Planning Group Inc. Retirement Planning Guide 2015 Edition 2015 Edition Table of Contents Why you should help your clients set up a Qualified Retirement Plan 3 Overview of Qualified Plans 4 Chart of Qualified Retirement Plan Options 5 Individual Retirement Account

More information

Retirement Plan Choices and Design Options

Retirement Plan Choices and Design Options Richard A. Naegele Attorney at Law Fellow, American College of Employee Benefits Counsel 35765 Chester Road Avon, OH 44011-1262 Main: (440) 695-8000 Direct: (440) 695-8074 Fax: (440) 695-8098 Email: RNaegele@WickensLaw.com

More information

Fully Insured Pension Plan

Fully Insured Pension Plan Fully Insured Pension Plan Marketing Guide There are approximately 23 million small businesses in the U.S.* *Small Business Administration: Small Business Trends (sba.gov) The Market for Fully Insured

More information

5. Defined Benefit and Defined Contribution Plans: Understanding the Differences

5. Defined Benefit and Defined Contribution Plans: Understanding the Differences 5. Defined Benefit and Defined Contribution Plans: Understanding the Differences Introduction Both defined benefit and defined contribution pension plans offer various advantages to employers and employees.

More information

Pension Protection Act of 2006 Changes Affect Single-Employer Defined Benefit Plans in 2008

Pension Protection Act of 2006 Changes Affect Single-Employer Defined Benefit Plans in 2008 Important Information Legislation June 2007 Pension Protection Act of 2006 Changes Affect Single-Employer Defined Benefit Plans in 2008 This is one of a series of Pension Analyst publications providing

More information

Appendix A: Types of Retirement Plans

Appendix A: Types of Retirement Plans Appendix A: Types of Retirement Plans (Congress periodically changes the applicable dollar amounts, percentages, and employee age requirements for the various retirement plans discussed in this section

More information

CHAPTER 6 DEFINED BENEFIT AND DEFINED CONTRIBUTION PLANS: UNDERSTANDING THE DIFFERENCES

CHAPTER 6 DEFINED BENEFIT AND DEFINED CONTRIBUTION PLANS: UNDERSTANDING THE DIFFERENCES CHAPTER 6 DEFINED BENEFIT AND DEFINED CONTRIBUTION PLANS: UNDERSTANDING THE DIFFERENCES Introduction Both defined benefit and defined contribution pension plans offer various advantages to employers and

More information

IV. Review of Qualified Plan Choices. A chart showing basic types of Qualified Plans allowed under IRC 401(a) follows:

IV. Review of Qualified Plan Choices. A chart showing basic types of Qualified Plans allowed under IRC 401(a) follows: IV. Review of Qualified Plan Choices A chart showing basic types of Qualified Plans allowed under IRC 401(a) follows: Tax Qualified Savings Plans By Category Qualified Plans Defined Contribution Defined

More information

PRESENT LAW AND BACKGROUND RELATING TO THE TAX TREATMENT OF RETIREMENT SAVINGS

PRESENT LAW AND BACKGROUND RELATING TO THE TAX TREATMENT OF RETIREMENT SAVINGS PRESENT LAW AND BACKGROUND RELATING TO THE TAX TREATMENT OF RETIREMENT SAVINGS Scheduled for a Public Hearing Before the HOUSE COMMITTEE ON WAYS AND MEANS on April 17, 2012 Prepared by the Staff of the

More information

IRAs, pensions and other retirement savings vehicles

IRAs, pensions and other retirement savings vehicles from Personal Financial Services IRAs, pensions and other retirement savings vehicles February 27, 2014 In brief Qualified plans and IRAs are an essential part of retirement and tax planning for many individuals.

More information

Lump-Sum Pension Payments: 2008 and Beyond

Lump-Sum Pension Payments: 2008 and Beyond BENEFITS INFORMATION BULLETIN Milliman Employee Benefits December 14, 2007 BIB 07-01 Effective for plan years beginning in 2008, ERISA-covered defined benefit retirement plans that offer participants lump-sum

More information

Pension Protection Act of 2006 Makes Changes To Defined Benefit Governmental and Church Plans

Pension Protection Act of 2006 Makes Changes To Defined Benefit Governmental and Church Plans Important Information Legislation November 2006 Pension Protection Act of 2006 Makes Changes To Defined Benefit Governmental and Church Plans This is one of a series of Pension Analyst publications providing

More information

IRS Issues Final and Proposed Hybrid Plan Regulations

IRS Issues Final and Proposed Hybrid Plan Regulations IRS Issues Final and Proposed Hybrid Plan Regulations October 2010 Date Aon Hewitt 2010 Hewitt Associates LLC Brief Description: On October 18, 2010, the Internal Revenue Service (IRS) released final and

More information

Internal Revenue Service Enrolled Retirement Plan Agent Special Enrollment Examination (ERPA-SEE) Syllabus. Part I: Compliance and Operational Issues

Internal Revenue Service Enrolled Retirement Plan Agent Special Enrollment Examination (ERPA-SEE) Syllabus. Part I: Compliance and Operational Issues Internal Revenue Service Enrolled Retirement Plan Agent Special Enrollment Examination (ERPA-SEE) Syllabus Part I: Compliance and Operational Issues I. General Description The syllabus for Part I of the

More information

Defined Benefit Listing of Required Modifications and Information Package (LRM) CASH BALANCE SUPPLEMENT

Defined Benefit Listing of Required Modifications and Information Package (LRM) CASH BALANCE SUPPLEMENT Defined Benefit Listing of Required Modifications and Information Package (LRM) CASH BALANCE SUPPLEMENT To Sponsors of Master or Prototype Plans: This information package amends and supplements the initial

More information

TYPES OF QUALIFIED PLANS

TYPES OF QUALIFIED PLANS by Richard A. Naegele, J.D., M.A. Wickens, Herzer, Panza, Cook & Batista Co. 35765 Chester Road Avon, OH 44011-1262 Phone: (440) 695-8074 Email: RNaegele@WickensLaw.com Website: www.wickenslaw.com 1114200.pptx

More information

Executive Retirement Arrangements

Executive Retirement Arrangements COMPENSATION COMMITTEE HANDBOOK &A Executive Retirement Arrangements Qualified Retirement Plans A qualified retirement plan is a funded plan for which organizational assets irrevocably have been set aside,

More information

TYPES OF QUALIFIED RETIREMENT PLANS. Pamela D. Perdue Summers, Compton, Wells & Hamburg

TYPES OF QUALIFIED RETIREMENT PLANS. Pamela D. Perdue Summers, Compton, Wells & Hamburg TYPES OF QUALIFIED RETIREMENT PLANS Pamela D. Perdue Summers, Compton, Wells & Hamburg I. WHY CHOOSE A QUALIFIED PLAN? A qualified plan provides an exception from the general rules requiring matching of

More information

Actuarial Speak 101 Terms and Definitions

Actuarial Speak 101 Terms and Definitions Actuarial Speak 101 Terms and Definitions Introduction and Caveat: It is intended that all definitions and explanations are accurate. However, for purposes of understanding and clarity of key points, the

More information

DEFINED CONTRIBUTION PROVISIONS OF THE PENSION PROTECTION ACT OF 2006. by Timothy J. Snyder, Esquire

DEFINED CONTRIBUTION PROVISIONS OF THE PENSION PROTECTION ACT OF 2006. by Timothy J. Snyder, Esquire DEFINED CONTRIBUTION PROVISIONS OF THE PENSION PROTECTION ACT OF 2006 by Timothy J. Snyder, Esquire The Pension Protection Act of 2006 ( PPA ) is a colossal 907 page statute, 779 of which relate to retirement

More information

RETIREMENT PLAN OPTIONS FOR SMALL- TO MID-SIZE BUSINESSES

RETIREMENT PLAN OPTIONS FOR SMALL- TO MID-SIZE BUSINESSES RETIREMENT PLAN OPTIONS FOR SMALL- TO MID-SIZE BUSINESSES David Eisenman HMWC CPAs & Business Advisors Doug Jones Creative Retirement Solutions, LLC NON-QUALIFIED RETIREMENT PLANS SIMPLE AND SEP PLANS

More information

Employee Benefits for the Closely Held Business

Employee Benefits for the Closely Held Business College of William & Mary Law School William & Mary Law School Scholarship Repository William & Mary Annual Tax Conference Conferences, Events, and Lectures 21 Employee Benefits for the Closely Held Business

More information

CRS Report for Congress

CRS Report for Congress Order Code RS21451 Updated February 6, 2004 CRS Report for Congress Received through the CRS Web Retirement Savings Accounts: President s Budget Proposal for FY2005 Summary Patrick J. Purcell Specialist

More information

Basics of Corporate Pension Plan Funding

Basics of Corporate Pension Plan Funding Basics of Corporate Pension Plan Funding A White Paper by Manning & Napier www.manning-napier.com Unless otherwise noted, all figures are based in USD. 1 Introduction In general, a pension plan is a promise

More information

Questions and Answers Learn about Top-Heavy Plans with ftwilliam.com Industry Experts Webinar January 29, 2013

Questions and Answers Learn about Top-Heavy Plans with ftwilliam.com Industry Experts Webinar January 29, 2013 Questions and Answers Learn about Top-Heavy Plans with ftwilliam.com Industry Experts Webinar January 29, 2013 Below are written Q&As from our January 29, 2013 webinar. You can find other webinar materials,

More information

Business Retirement Plans Choose Wisely

Business Retirement Plans Choose Wisely Business Retirement Plans Choose Wisely Business Retirement Plans BNY Mellon Retirement is here to help you craft the bold solutions that help deliver successful retirement outcomes. Americans are expected

More information

In recent years, plan sponsors have been focusing

In recent years, plan sponsors have been focusing November 2012 By Elizabeth Thomas Dold and David N. Levine A Look at Retiree Cashouts as the New De-Risking Strategy Elizabeth Thomas Dold and David N. Levine are Principals at Groom Law Group, Chartered

More information

Title IV Treatment of Rollovers from Defined Contribution Plans to Defined Benefit Plans

Title IV Treatment of Rollovers from Defined Contribution Plans to Defined Benefit Plans [Billing Code 7709-02-P] PENSION BENEFIT GUARANTY CORPORATION 29 CFR Parts 4001, 4022, and 4044 RIN 1212-AB23 Title IV Treatment of Rollovers from Defined Contribution Plans to Defined Benefit Plans AGENCY:

More information

G Employee Benefits Alert

G Employee Benefits Alert G Employee Benefits Alert August 2001 The Economic Growth and Tax Relief Reconciliation Act of 2001 The Economic Growth and Tax Relief Reconciliation Act of 2001 (the Act ) ushers in the most significant

More information

Glossary of Qualified

Glossary of Qualified Glossary of Qualified Retirement Plan Terms 401(k) Plan: A qualified profit sharing or stock bonus plan under which plan participants have an option to put money into the plan or receive the same amount

More information

10/5/2015. Workshop 63: Lump Sum Issues. James E. Holland, Jr., Cheiron, Inc.

10/5/2015. Workshop 63: Lump Sum Issues. James E. Holland, Jr., Cheiron, Inc. Workshop 63: Lump Sum Issues James E. Holland, Jr., Cheiron, Inc. 1 Overall Focus Traditional formula type (annuity defined) What lump sum must be paid? What lump sum can be paid? Lump sum based formula

More information

Executive Summary. Introduction

Executive Summary. Introduction 2013 ERISA Advisory Council Private Sector Pension De-risking and Participant Protections Testimony of John G. Ferreira Partner, Morgan, Lewis & Bockius LLP 1 Executive Summary In my view, there is no

More information

The Pension Protection Act of 2006

The Pension Protection Act of 2006 Raymond James John Dulay Financial Advisor 550 W. Washington Blvd. Suite 1050 Chicago, IL 60661 312-869-3889 888-711-4301 John.Dulay@raymondjames.com www.truenorthretirementpartners.com The Pension Protection

More information

Profit Sharing Allocation Methods - The Better Part of Discretion

Profit Sharing Allocation Methods - The Better Part of Discretion Profit Sharing Allocation Methods - The Better Part of Discretion A White Paper by Manning & Napier www.manning-napier.com Unless otherwise noted, all figures are based in USD. 1 Most Profit Sharing/401(k)

More information

Cash or Deferred 401(k) Plan

Cash or Deferred 401(k) Plan The Basics Any profit sharing or stock bonus plan that meets certain participation requirements of IRC Sec. 40(k) can be a cash or deferred plan. An employee can agree to a salary reduction or to defer

More information

START" - Save Today and Retire Tomorrow. Solutions to Enhance Retirement Security for Executives

START - Save Today and Retire Tomorrow. Solutions to Enhance Retirement Security for Executives START" - Save Today and Retire Tomorrow Solutions to Enhance Retirement Security for Executives Erik Pienkos Senior Manager Benefits Consulting Practice erik.pienkos@gt.com Background Survey data indicates

More information

Freezing Defined Benefit Plans

Freezing Defined Benefit Plans View the online version at http://us.practicallaw.com/6-502-3611 Freezing Defined Benefit Plans DAVID N. LEVINE AND LARS C. GOLUMBIC, GROOM LAW GROUP, CHARTERED This Practice Note provides a basic overview

More information

SUMMARY PLAN DESCRIPTION

SUMMARY PLAN DESCRIPTION Qualified Retirement Plan SUMMARY PLAN DESCRIPTION 150838 Rev. 11/08 Qualified Retirement Plan and Trust Summary Plan Description TABLE OF CONTENTS INTRODUCTION...iii DEFINITIONS...1 Beneficiary...1 Catch-up

More information

New Comparability Plan: A New Paradigm in Retirement Planning for Small- Business Owners by Keith R. Fevurly, CFP, J.D., LL.M.

New Comparability Plan: A New Paradigm in Retirement Planning for Small- Business Owners by Keith R. Fevurly, CFP, J.D., LL.M. New Comparability Plan: A New Paradigm in Retirement Planning for Small- Business Owners by Keith R. Fevurly, CFP, J.D., LL.M. Executive Summary A profitable, closely held small-business owner not only

More information

Retirement, Health, and Life Insurance. Part Two

Retirement, Health, and Life Insurance. Part Two Retirement, Health, and Life Insurance Part Two Chapter Four Employer-Sponsored Retirement Plans Chapter Outline Defining Retirement Plans Origins of Employer-Sponsored Retirement Benefits Trends in Retirement

More information

CASH BALANCE PENSION PLANS AND OLDER WORKERS

CASH BALANCE PENSION PLANS AND OLDER WORKERS CASH BALANCE PENSION PLANS AND OLDER WORKERS Introduction This Issue Brief discusses issues related to cash balance plan design in the context of both traditional defined benefit (DB) pension plans and

More information

EXPLANATORY NOTES FOR TWO PLANS ARE BETTER THAN ONE

EXPLANATORY NOTES FOR TWO PLANS ARE BETTER THAN ONE EXPLANATORY NOTES FOR TWO PLANS ARE BETTER THAN ONE Page 1 Page 2 As with most partnerships in life, there are match s of strengths with weaknesses. This is the case with adding on a Cash Balance Plan

More information

PENSION PLANS: EVERYTHING YOU NEED TO KNOW, BUT WERE AFRAID TO ASK. October, 2010

PENSION PLANS: EVERYTHING YOU NEED TO KNOW, BUT WERE AFRAID TO ASK. October, 2010 PENSION PLANS: EVERYTHING YOU NEED TO KNOW, BUT WERE AFRAID TO ASK October, 2010 by: Marcia S. Wagner, Esq. The Wagner Law Group A Professional Corporation 99 Summer Street, 13 th Floor Boston, MA 02110

More information

Workshop 28 Actuarial Potpourri

Workshop 28 Actuarial Potpourri Workshop 28 Actuarial Potpourri Richard A. Block, ASA, FSPA, MAAA, Block Consulting Actuaries, Inc., El Segundo, CA Michael B. Preston, FSPA, MAAA, EA, President, Preston Actuarial Services, Inc., Orland,

More information

Employee Relations. Terminating 403(b) Arrangements: IRS Guidance Answers Some Questions, Avoids Others. Anne E. Moran

Employee Relations. Terminating 403(b) Arrangements: IRS Guidance Answers Some Questions, Avoids Others. Anne E. Moran VOL. 36, NO. 2 AUTUMN 2011 Employee Relations L A W J O U R N A L Employee Benefits Terminating 403(b) Arrangements: IRS Guidance Answers Some Questions, Avoids Others Anne E. Moran T he legal requirements

More information

NEW TRENDS IN PUBLIC SECTOR PLANS. By Cindy S. Birley and Rebecca L. Hudson Davis, Graham & Stubbs, Denver, CO

NEW TRENDS IN PUBLIC SECTOR PLANS. By Cindy S. Birley and Rebecca L. Hudson Davis, Graham & Stubbs, Denver, CO RETIREMENT BENEFITS NEW TRENDS IN PUBLIC SECTOR PLANS By Cindy S. Birley and Rebecca L. Hudson Davis, Graham & Stubbs, Denver, CO THIS ARTICLE EXAMINES recent trends in the benefits that public sector

More information

401(k) Summary Plan Description

401(k) Summary Plan Description 401(k) Summary Plan Description WELLSPAN 401(K) RETIREMENT SAVINGS PLAN SUMMARY PLAN DESCRIPTION I I PRIOR TO II III I TABLE OF TO YOUR PLAN What kind of Plan is this? 5 What information does this Summary

More information

Qualified Retirement Plans

Qualified Retirement Plans Qualified Retirement Plans A reference guide Put together by the Qualified Plans Resource Group For Financial Professional Use Only. Not for use with the public. Any discussion pertaining to taxes in this

More information

Research Memorandum. 2013 Enrolled Actuaries Gray Book Question 6

Research Memorandum. 2013 Enrolled Actuaries Gray Book Question 6 Research Memorandum RE: Interpretation of IRC 415(b) Related to Reduced Early Retirement Benefits and Qualified Joint and Survivor Annuities FROM: Paul Zorn DATE: September 30, 2013 The following memorandum

More information

Choosing a Retirement Plan for Your Business

Choosing a Retirement Plan for Your Business january 2014 Choosing a Retirement Plan for Your Business introduction Table of Contents Building Your Retirement Starting and maintaining a retirement plan for your business can be easier than you think

More information

Small Business Plans Business owner guide

Small Business Plans Business owner guide Small Business Plans Business owner guide Contents 1 Why Consider a Retirement Plan? 2 SEP Plan 4 SIMPLE IRA 6 Age-Weighted Profit Sharing Plan 8 New Comparability Profit Sharing Plan 10 Safe Harbor 401(k)

More information

PROTOTYPE SIMPLIFIED EMPLOYEE PROTOTYPE PLAN

PROTOTYPE SIMPLIFIED EMPLOYEE PROTOTYPE PLAN PROTOTYPE SIMPLIFIED EMPLOYEE PROTOTYPE PLAN PROTOTYPE SIMPLIFIED EMPLOYEE PENSION PLAN AGREEMENT ARTICLE I Adoption and Purpose of Plan 1.01 Adoption of Plan: By completing and signing the Adoption Agreement,

More information

Earning Cash Balance Pay Credits

Earning Cash Balance Pay Credits You Have a Choice New Cash Balance Pension You Have a Choice The important thing to understand is this: If you were hired through December 31, 2012 you don t have to change to the new cash balance pension

More information

Small Retirement Plans Face Funding Dilemma. Explore strategic options to realign your plan with current and future business needs.

Small Retirement Plans Face Funding Dilemma. Explore strategic options to realign your plan with current and future business needs. Page 1 of 5 EMPLOYEE BENEFITS / BUSINESS & INDUSTRY Small Retirement Plans Face Funding Dilemma Explore strategic options to realign your plan with current and future business needs. BY JAMES PODLESKI

More information

Qualified Retirement Plan

Qualified Retirement Plan Qualified Retirement Plan SUMMARY PLAN DESCRIPTION 150838 02/13 This page intentionally left blank. Qualified Retirement Plan and Trust Summary Plan Description TABLE OF CONTENTS INTRODUCTION... iii DEFINITIONS...

More information

10. Cash Balance Pension Plans and Other Hybrid Retirement Plans

10. Cash Balance Pension Plans and Other Hybrid Retirement Plans 10. Cash Balance Pension Plans and Other Hybrid Retirement Plans Introduction An increasing number of employers have been offering retirement plans that combine features of both defined benefit and defined

More information

COMPENSATION & EMPLOYEE BENEFITS LAW BULLETIN A BIRDSEYE VIEW OF THE PENSION PROTECTION ACT OF 2006

COMPENSATION & EMPLOYEE BENEFITS LAW BULLETIN A BIRDSEYE VIEW OF THE PENSION PROTECTION ACT OF 2006 COMPENSATION & EMPLOYEE BENEFITS LAW BULLETIN A BIRDSEYE VIEW OF THE PENSION PROTECTION ACT OF 2006 The Pension Protection Act of 2006 (the Act ) is arguably the most comprehensive pension reform legislation

More information

SIMPLIFIED EMPLOYEE PLAN

SIMPLIFIED EMPLOYEE PLAN SIMPLIFIED EMPLOYEE PLAN SIMPLIFIED EMPLOYEE PENSION PLAN AGREEMENT ARTICLE I Adoption and Purpose of Plan 1.01 Adoption of Plan: By completing and signing the Adoption Agreement, the Employer adopts the

More information

Lump Sum Payments for Terminated Vested Participants. 2012 Retirement Webinar Series March 8, 2012

Lump Sum Payments for Terminated Vested Participants. 2012 Retirement Webinar Series March 8, 2012 Lump Sum Payments for Terminated Vested Participants 2012 Retirement Webinar Series March 8, 2012 Lump Sum Payments for Terminated Vested Participants Today s Participants Joe McDonald Aon Hewitt Byron

More information

Chapter 7 Defined benefit audit techniques

Chapter 7 Defined benefit audit techniques Chapter 7 Defined benefit audit techniques By Robert Meegan (Northeast) And Dave Harstein (Northeast), and Donna Prestia (CE&O), Reviewers INTERNAL REVENUE SERVICE TAX EXEMPT AND GOVERNMENT ENTITIES Table

More information

Plan Sponsor 401(k) Retirement Plan Analysis

Plan Sponsor 401(k) Retirement Plan Analysis Plan Sponsor 401(k) Retirement Plan Analysis Table of Contents: 3 Controlled Groups & Affiliated Service Groups 4 Plan Design Alternatives 5 401(k) Testing Requirements 6 ADP & ACP Testing 7 Top Heavy

More information

IRS Nondiscrimination Proposal Limits QSERPs, Adds Cross-Testing Option and New Closed Plan Relief

IRS Nondiscrimination Proposal Limits QSERPs, Adds Cross-Testing Option and New Closed Plan Relief IRS Nondiscrimination Proposal Limits QSERPs, Adds Cross-Testing Option and New Closed Plan Relief Proposed IRS regulations would tighten some of the nondiscrimination options that had allowed for flexible

More information

A AM Best AA- S & P COMDEX of 95 104 Years Old GALVESTON TEXAS

A AM Best AA- S & P COMDEX of 95 104 Years Old GALVESTON TEXAS Cash Balance Pension Plans Presented By Michael F. Kresl, CPA National Sales Manager The American National Insurance Company 1 The AMERICAN NATIONAL INSURANCE COMPANY (ANICO) A AM Best AA- S & P COMDEX

More information

THE SUPER 401K PLAN & THE SUPER 401K PLAN WITH THE PRIME OPTION

THE SUPER 401K PLAN & THE SUPER 401K PLAN WITH THE PRIME OPTION THE SUPER 401K PLAN & THE SUPER 401K PLAN WITH THE PRIME OPTION INTRODUCING THE TAX RESERVE A TAX FREE RETIREMENT INCOME/LIFE INSURANCE BENEFIT FULLY FUNDED BY TAX DEFERRALS MAXIMUM TAX DEDUCTIBLE CONTRIBUTIONS

More information

Part III. Administrative, Procedural, and Miscellaneous. Miscellaneous Pension Protection Act Changes. Notice 2007-7 I. PURPOSE

Part III. Administrative, Procedural, and Miscellaneous. Miscellaneous Pension Protection Act Changes. Notice 2007-7 I. PURPOSE Part III. Administrative, Procedural, and Miscellaneous Miscellaneous Pension Protection Act Changes Notice 2007-7 I. PURPOSE This notice provides guidance in the form of questions and answers with respect

More information

The Five Pillars of a Retirement Plan

The Five Pillars of a Retirement Plan The Five Pillars of a Retirement Plan An employee retirement plan can help: Recruit and retain valuable employees Bridge the gap between Social Security and retirement income needs, which are estimated

More information

The Split Personalities of 457(b) Nonqualified Plans

The Split Personalities of 457(b) Nonqualified Plans VOLUME 39, NUMBER 3 JOURNAL of PENSION PLANNING & COMPLIANCE Editor-in-Chief: Bruce J. McNeil, Esq. FALL 2013 JPPC The Split Personalities of 457(b) Nonqualified Plans DANIEL SCHWALLIE Daniel Schwallie,

More information

CHOOSING A RETIREMENT SOLUTION. for Your Small Business

CHOOSING A RETIREMENT SOLUTION. for Your Small Business CHOOSING A RETIREMENT SOLUTION for Your Small Business Choosing a Retirement Solution for Your Small Business is a joint project of the U.S. Department of Labor s Employee Benefits Security Administration

More information

INSTRUCTIONS FOR 403(b) PROTOTYPE PLAN AND COMPLETION OF 403(b) ADOPTION AGREEMENTS

INSTRUCTIONS FOR 403(b) PROTOTYPE PLAN AND COMPLETION OF 403(b) ADOPTION AGREEMENTS INSTRUCTIONS FOR 403(b) PROTOTYPE PLAN AND COMPLETION OF 403(b) ADOPTION AGREEMENTS The 403(b) Prototype Plan authorizes elections, either by adoption agreement selection or by other action. Each election

More information

CHAPTER 17, DEFINED BENEFIT ACCRUALS

CHAPTER 17, DEFINED BENEFIT ACCRUALS CHAPTER 17, DEFINED BENEFIT ACCRUALS by Avaneesh Bhagat, (Western) Ann Trichilo, (Rulings and Agreements) INTERNAL REVENUE SERVICE TAX EXEMPT AND GOVERNMENT ENTITIES TABLE OF CONTENTS INTRODUCTION:...

More information

An Overview of Money Purchase Retirement Plans

An Overview of Money Purchase Retirement Plans An Overview of Money Purchase Retirement Plans Prepared by David D. Bohyer, Research Director April 2008 INTRODUCTION As a component part of the HJR 59 study of state employee retirement systems being

More information

401(k) Plan Executive Summary

401(k) Plan Executive Summary 401(k) Plan Executive Summary January 2016 3000 Lava Ridge Court, Suite 130 Roseville, CA 95661 Tel 916.773.3480 Fax 916.773.3484 6400 Canoga Avenue, Suite 250 Woodland Hills, CA 91367 Tel 818.716.0111

More information

Paired Plans. When we run a paired plan we are able to maximize the benefits and minimize the shortcomings of each type of plan.

Paired Plans. When we run a paired plan we are able to maximize the benefits and minimize the shortcomings of each type of plan. T raditionally, companies have had the option of adopting either a Defined Contribution Plan, such as a 401(k) Profit Sharing Plan, or a Defined Benefit Plan. Each of these types of plans has advantages

More information

De-risking Alternatives for Plan Sponsors Compliance Requirements. April 16, 2015 Presented by: Michael Falk, Erin Kartheiser, and Steve Flores

De-risking Alternatives for Plan Sponsors Compliance Requirements. April 16, 2015 Presented by: Michael Falk, Erin Kartheiser, and Steve Flores De-risking Alternatives for Plan Sponsors Compliance Requirements April 16, 2015 Presented by: Michael Falk, Erin Kartheiser, and Steve Flores Today s elunch Presenters Michael Falk Partner, Employee Benefits

More information

Nonqualified Plans of Non-Profit Employers and New Code Section 409A

Nonqualified Plans of Non-Profit Employers and New Code Section 409A Nonqualified Plans of Non-Profit Employers and New Code Section 409A by Danny Miller Erica Summers Conner & Winters, P.C. 1627 I Street, N.W. Suite 900 Washington, D.C. 202-887-5711 (800) 579-0811 Nonqualified

More information

AMENDMENT FOR PENSION PROTECTION ACT AND HEART ACT ARTICLE I PREAMBLE

AMENDMENT FOR PENSION PROTECTION ACT AND HEART ACT ARTICLE I PREAMBLE AMENDMENT FOR PENSION PROTECTION ACT AND HEART ACT ARTICLE I PREAMBLE 1.1 Effective date of Amendment. The Employer, or if applicable, the sponsor on behalf of the Employer, adopts this Amendment to the

More information

Obama Administration Budget Proposals Would Expand Impact on Tax-Favored Retirement Benefits

Obama Administration Budget Proposals Would Expand Impact on Tax-Favored Retirement Benefits February 9, 2015 If you have questions, please contact your regular Groom attorney or one of the attorneys listed below: David J. Ashner dashner@groom.com (202) 861-6330 Louis T. Mazawey lmazawey@groom.com

More information

Variable Annuity Pension Plans: A Balanced Approach to Retirement Risk

Variable Annuity Pension Plans: A Balanced Approach to Retirement Risk Variable Annuity Pension Plans: A Balanced Approach to Retirement Kelly Coffing, EA, FSA, MAAA Principal and Consulting Actuary Milliman, Seattle, Washington Grant Camp, EA, FSA, MAAA, Consulting Actuary

More information

This will depend upon three factors.

This will depend upon three factors. The basics: A SEP provides an employer with a simplified way to make contributions to an employee s individual retirement account or individual retirement annuity. Employer contributions are made directly

More information

SECTION 401(a) SECTION 414(q) SECTION 414(s) Overview to Non-discrimination 401-1

SECTION 401(a) SECTION 414(q) SECTION 414(s) Overview to Non-discrimination 401-1 SECTION 401(a) SECTION 414(q) SECTION 414(s) Overview to Non-discrimination 401-1 INTERNAL REVENUE CODE 401(a) 401(a) has a laundry list of items that are required for a plan to be qualified: 401(a)(3)

More information

Major Retirement Savings Provisions of EGTRRA

Major Retirement Savings Provisions of EGTRRA Major Retirement Savings Provisions of EGTRRA Issue Current Law Prior Law Reinstated in 2011 if EGTRRA Sunsets IRA LIMITS IRA Contributions Limit Catch-Up Contributions The IRA maximum annual contribution

More information

Restricted Benefits Revisited

Restricted Benefits Revisited IMPORTANT INFORMATION Distributions and Withdrawals February 2004* Restricted Benefits Revisited WHO'S AFFECTED This guidance primarily affects sponsors of qualified defined benefit plans and participants

More information

AVOID MISTAKES WITH TIMELY DEPOSITS

AVOID MISTAKES WITH TIMELY DEPOSITS EMPLOYEE BENEFITS INSIDER Spring 12 AVOID MISTAKES WITH TIMELY DEPOSITS In any qualified retirement plan, money comes in and money goes out. An area that garners Department of Labor (DOL) attention is

More information

Important Information Morgan Stanley SIMPLE IRA Summary

Important Information Morgan Stanley SIMPLE IRA Summary SIMPLE IRA Summary September 2013 Important Information Morgan Stanley SIMPLE IRA Summary The following is intended to provide you with basic information on the roles and services that Morgan Stanley Smith

More information

Retirement Plans For the Sole Practitioner and the Small Law Firm

Retirement Plans For the Sole Practitioner and the Small Law Firm Retirement Plans For the Sole Practitioner and the Small Law Firm Richard A. Rogers, Jr. Employee Benefits Group This article addresses the question What retirement program would be a good match for a

More information

The MC Academy The Employee Benefits and Executive Compensation Series QUALIFIED PLANS PART 1

The MC Academy The Employee Benefits and Executive Compensation Series QUALIFIED PLANS PART 1 The MC Academy The Employee Benefits and Executive Compensation Series QUALIFIED PLANS PART 1 May 14, 2013 What is a Qualified Plan? Retirement Plan Pays benefits on retirement or other termination of

More information