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Cash Balance plans

2021 Retirement Policy – A Year In Review

Throughout the year, we have followed the performance of the interest rate and securities markets, tracking their effect on retirement finance. As of mid-December, interest rates are up 30-40 basis points for plans with typical duration, and the S&P 500 is up 25% on the year.

Plan design and 2018 market performance

In this article we consider the “gains” and “losses” sustained by retirement plans of different designs, based on the performance of the asset and interest rate markets in 2018. How, and in what different ways, did 2018 market performance affect participants in and sponsors of these plans? Summary We consider four different basic plan designs:…Read More

Portman and Cardin propose comprehensive retirement policy legislation

Senators Portman (R-OH) and Cardin (D-MD) have released a summary and discussion draft of “A Bill To Enhance Retirement Security” (“Portman Cardin 2018”), proposing significant changes to current rules not included in either the House Republicans’ Family Savings Act (FSA) or the Senate’s bipartisan Retirement Enhancement and Savings Act (RESA). In this article we review…Read More

Advantages to a Market Return Cash Balance Plan Design

As discussed in our Cash Balance (CB) Survey on “Cash Balance Plans – 2018 Survey and Trends”, professional service firms have significantly increased their adoption of Market Return Cash Balance plans over the past twelve years. In addition to the conversion of existing Fixed Rate plans, virtually every new Cash Balance Plan is incorporating the…Read More

Top ways your traditional administration platform could be costing you

As companies grow and pension benefit needs evolve, technology must adapt to serve any new conditions that may arise. When it comes to managing defined benefit (DB) plans, however, many administration platforms continue to operate with dated, inflexible systems. Such models can create extra workload, generate unnecessary expense, and cause frustration among sponsors and participants…Read More

Cash Balance Plans: 2018 Survey and Trends

In this report we review the use of cash balance features in defined benefit plans sponsored by U.S. employers with a focus on the evolution of interest crediting bases utilized by those plans. Our emphasis on interest crediting is prompted by current and prospective cash balance plan sponsors seeking interest crediting bases that are more…Read More

Legal and Regulatory Update – December 2015

In this article, we discuss: the final IRS rules for hybrid plans not in compliance with the market rate of return standard – those rules also postpone the effective date of 2014 hybrid rules to 2017; the recent decision in Pfeil v. State Street, a stock drop case; ERISA Advisory Council recommendations with respect to…Read More

Cash balance plans: 2015 update

Many sponsors maintain cash balance plans, either as (1) their main retirement benefits program, (2) a program for a specific group of employees (e.g., employees ‘grandfathered’ in connection with a ‘soft freeze’), or (3) a legacy benefit for certain employees (in connection, e.g., with a ‘hard freeze’). In 2014, IRS finalized cash balance plan regulations,…Read More