Cash Balance Plan Answer Book

Cash Balance Plan Answer Book

by Daniel Schwallie, Barbara Hogg, Paul Rangecroft
     
 

ISBN-10: 0735570787

ISBN-13: 9780735570788

Pub. Date: 11/30/2007

Publisher: Wolters Kluwer Law & Business

Cash Balance Plan Answer Book is the only resource that provides reliable answers to over 500 cash balance plan questions. Logically organized in the popular Q&A format, the Cash Balance Plan Answer Book is a user-friendly guide that explains the fundamentals of cash balance plans and how and when to use them. This unique resource provides support

Overview

Cash Balance Plan Answer Book is the only resource that provides reliable answers to over 500 cash balance plan questions. Logically organized in the popular Q&A format, the Cash Balance Plan Answer Book is a user-friendly guide that explains the fundamentals of cash balance plans and how and when to use them. This unique resource provides support as you consider - and implement - cash balance plans.

Cash Balance Plan Answer Book enables you to:

  • Determine whether cash balance plans are right for your company or your clients
  • Explain exactly how cash balance plans work
  • Clarify how cash balance plans can be used with traditional retirement plans or 401(k) plans for the benefit of both the plan sponsor and participants
  • Advise clients and executives on the pros and cons of cash balance plans
  • Guide your company or clients through the effective implementation of cash balance plans
  • Answer any cash balance plan question that comes up along the way

Here is just a sampling of the over-500 key questions that are answered in this one-of-a-kind resource:

  • How prevalent are cash balance plans?
  • Are there advantages of a cash balance plan over a defined contribution plan?
  • What types of business considerations would cause an employer to prefer a cash balance plan over a traditional defined benefit pension plan?
  • How have traditional plans been converted to cash balance plans?
  • What rules does the PPA create for cash balance plans?
  • How does the PPA change the age discrimination rules for cash balance plans?
  • How are qualified domestic relations orders (QDROs) administered under a cash balance plan?
  • What special considerations apply to cash balance plans for accrual rule purposes?
  • Are there special considerations when terminating a cash balance plan?
  • What special issues may apply to plans converted to cash balance before the PPA?

You'll also receive:

  • Planning tips - to get you on the right track from the start
  • Examples - to clarify complex issues
  • Cautions - to help you avoid pitfalls
  • Explanations of the law - to make sure you understand all the rules and regulations

Cash Balance Plan Answer Book has been updated to include coverage of the following significant changes affecting cash balance and other hybrid defined benefit plans:

  • Recent court rulings on age discrimination, which overwhelmingly hold that cash balance plan design is not inherently age discriminatory Updates on whipsaw requirements and concerns
  • Clarification of vesting rules for hybrid plans under the Worker, Retiree and Employer Recovery Act of 2008
  • Changes to 415 limits under the Worker, Retiree and Employer Recovery Act of 2008
  • Changes needed or expected to proposed hybrid plan regulations due to the Worker, Retiree and Employer Recovery Act of 2008 Nonspouse beneficiary rollovers required for plan years beginning after 2009 and requirements for withholding and notice modified under the Worker, Retiree and Employer Recovery Act of 2008
  • Information on good faith compliance with the annual funding notice requirements as provided by DOL Field Bulletin 2009-01

Product Details

ISBN-13:
9780735570788
Publisher:
Wolters Kluwer Law & Business
Publication date:
11/30/2007
Pages:
576

Table of Contents


• Introduction


• Cash Balance and Other Hybrid Pension Plans Defined
• The Legal Framework of Cash Balance Plans
• A Brief History of Cash Balance Plans
• Whipsaw
• Wearaway
• Age Discrimination


• Cash Balance Plan Design


• Basic Design
• Reasons for Offering Cash Balance Plans
• Designing Pay (or Service) Credits
• Defining Interest Credits
• Compensation Defined
• Eligibility for Participation
• Vesting Requirements
• Benefits at Retirement
• Benefits Available
• Benefit Limits
• Ancillary Benefits
• Contributory Plans
• Pension Equity Plans
• Impact of the Pension Protection Act of 2006 on Hybrid Plan Design
• Plan Mergers


• Administration


• Parties Involved in Plan Administration and Oversight
• Administrative Tasks
• Service Providers
• Paying for Administrative Fees
• Some Other Administrative Considerations for Cash Balance Plans


• Converting an Existing Defined Benefit Plan to Cash Balance


• Plan Conversion Approaches
• Opening Account Balance Conversions
• Impact on Plan Participants
• Transition Alternatives
• Other Considerations for Conversions


• Age Discrimination


• General Standard for Defined Benefit Plans
• Age Discrimination Controversy over Cash Balance Plan Design
• Safe Harbor Age Discrimination Standard
• Age Discrimination Rules Specific to Hybrid Defined Benefit Plans
• Other Age Discrimination Concerns


• Communication, Reporting, and Disclosure


• General Communication
• Communicating Plan Changes
• Participant Statements
• Summary Plan Descriptions
• Participant Communication about Plan Funding and Funded Status
• Communication at Distribution
• Other Reporting and Disclosure


• Plan Costs


• General Plan Cost Information
• Determining Plan Funding Costs
• Determining Accounting Costs for the Plan
• Other Plan Cost Considerations


• Eligibility and Vesting


• Minimum Participation and Vesting Requirements
• Determining Service
• Break-in-Service Rules
• Changing the Vesting Schedule


• Distributions


• Forms of Payment
• Required Minimum Distributions
• Taxation and Rollovers


• Accrual Rules


• Basic Rules
• Cash Balance Considerations


• Coverage and Nondiscrimination Testing


• Controlled Group
• Employees and Highly Compensated Employees
• Plan Coverage Requirements
• Defining Plans for Purposes of Testing
• Benefits Tests and Safe Harbors
• Other Nondiscrimination Considerations
• Separate Line of Business Rules


• Top Heavy Testing


• Basic Top Heavy Requirements
• Determining Key Employees
• Applying Top Heavy Requirements


• Investment of Plan Assets


• Basic Rules for Plan Investments
• Relationship between Asset and Liabilities
• Choosing Investments to Manage Risk


• Plan Termination


• Choosing to Terminate a Cash Balance Plan
• PBGC Requirements
• Notifying Plan Participants
• Other Considerations


• Qualified Domestic Relations Orders


• What is a QDRO
• Determining the QDRO Benefit
• Considerations During Plan Conversions

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