O3 Insights

Should I borrow money to fund up my pension plan?

In 2015, the Pension Benefit Guaranty Corporation variable rate premium will increase to $18 per $1,000 of unfunded vested liability. In effect, the variable premium will be a 1.8% per year charge for "underfunding." A sponsor can avoid that charge by, e.g., borrowing an amount sufficient to fund the defined benefit plan's unfunded vested benefits (UVB). What is the tradeoff -- at what interest rate (and rate of return and other variables) does it become financially ‘worth it’ to borrow and fund rather than continue to pay the PBGC variable premium? In this article we address that question. Read More

Law Firm Defined Benefit Plan Structures

During the past 15 years, virtually every law firm in the Am Law 100 has adopted a defined benefit plan to provide their Partners with enhanced retirement benefits. While each Firm may have different objectives for what they wish to accomplish, certain general themes are shared when it comes to key design considerations. Read More

Why use a ReDefined Benefit strategy?

In this article we provide a summary of why we think employers should consider a ReDefined Benefit (ReDB™) design, rather than a 401(k) or other defined contribution (DC) plan, as a core retirement plan for employers. Read More

Cash Balance Plan Design

It seems just about everyone in the retirement industry is writing articles about cash balance plans these days, from actuaries to investment managers to third party administrators. All agree they are a great way to create additional income deferral for business owners in professional service firms as well as other owner-operated businesses. High contribution limits, design flexibility and ease of understanding are among the features that make these plans such a good fit. Read More

Cash Balance Plan Administration in the 21st Century

As many companies are coming to appreciate the value of the Market Return cash balance plan design, managing economic risk and contribution volatility has become much more realistic. Today’s cash balance plans now work in harmony with 401(k)/Profit Sharing Plans to deliver significant risk reduction for sponsors, with predictable contributions and manageable costs. So why shouldn’t they look and feel just like a defined contribution plan to participants as well? The answer is they really should, and with the aid of some leading edge technology they most certainly can. That’s why we’ve developed the October Three Daily Cash Balance Platform. Read More

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Latest News:

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