Pension Protection Act Blog

The IRS issued a correction to the Proposed Regulations on Hybrid Retirement Plans, commonly known as the proposed cash balance plan regulations, which the Service issued on December 27, 2007. Besides correcting a few grammatical errors, the IRS has made a significant change in Proposed Treas. Reg. section 1.411(a)(13)-1. (hat tip to BenefitsLink.com)
The […]

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Today, among several items released by the IRS, is guidance on QOSAs. QOSAs are Qualified Optional Survivor Annuities. Section 1004 of the Pension Protection Act amended Code section 417 to require that plans subject to Code section 401(a)(11) must offer participants a specific optional form of benefit as an alternative to a Qualified Joint & […]

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Difficult, time-consuming, and expensive litigation with uncertain results - such as this case represents - is assuredly not a sensible way to manage the Nation’s retirement system for either employers or employees.

- Judge Mark R. Kravitz
U.S. District Judge, District of Connecticut
February 15, 2008

A partial decision is in from the […]

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On Friday, the IRS issued Revenue Ruling 2008-7, discussing the backloading rules for pension plans and Code section 411(b)(1). In 21 pages, the IRS provides an analysis of a traditional pension plan which converted into a cash balance pension plan prior to the effective date of the new conversion requirements under the Pension Protection […]

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The 1st Circuit Court of Appeals has delivered a very interesting opinion involving a grab bag of cash balance conversion issues. In Gillis v. SPX Corp. Individual Acct Retirement Plan, No. 07-1777 (Dec. 19, 2007), the 1st Circuit affirmed the district court’s granting of summary judgment in favor of the plan sponsor, stating that […]

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Just in time for the New Year, the IRS has released two major pieces of guidance in the form of proposed regulations. The first is Proposed Regulations on Hybrid Plans, providing guidance on changes made to cash balance plans by the Pension Protection Act and recent litigation. The release of this guidance is […]

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The Sixth Circuit Court of Appeals this week, in Jensen v. Moore Wallace North America, included cash balance jail in their reasoning on why participants in Moore Wallance North’s cash balance plan were not entitled to the plan’s surplus. Jenson v. Moore Wallace North America, No. 06-4388, (6th Cir. Aug. 21, 2007). (hat tip […]

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Interesting article in Dental Economics today by Brian Hufford. It is about how some of the changes made by the Pension Protection Act now make pairing a 401(k) plan with a cash balance plan attractive. The example given in the article is how a dentist employing his spouse can design a 401(k)/Cash Balance […]

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Dow Chemical announced that, starting in 2008, new eligible salaried employees will be enrolled in the company’s new cash balance plan instead of their existing traditional defined benefit plan. The new plan is named their Personal Pension Account.
A traditional defined benefit plan provides participants with a specific retirement benefit for life calculated using the […]

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At the Cincinnati Benefits Conference last week, I was surrounded by some of the giants of plan document design, especially pre-approved prototypes and volume submitter documents. At one point, around one table during lunch, sat the writers of prototypes and volume submitter documents used by more than 70% of 401(k) plans, profit sharing plans, […]

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