Headlines about "Ret plans - cash balance, hybrid"

Gathered from the web by the editors at BenefitsLink.com.
[Official Guidance] Corrections to Proposed IRS Regs on Hybrid (Cash Balance) Retirement Plans Issued on 12/28/2007 (PDF)
3 pages. Excerpt: "On page 73683 . . . the language 'reasonably expected to result in a larger' is corrected to read 'reasonably expected to result in a smaller'." (Internal Revenue Service)

[Opinion] ERIC Urges Mind-Set Change in Treasury's Proposed Hybrid Retirement Plan Regulations
Excerpt: "RIC's comments address many specific concerns with the regulations, among them: The IRS's inappropriate use of the determination letter and audit programs to make major interpretations of the law governing hybrid plans; An extremely limited interpretation of the market rate of return requirement that would prohibit plan sponsors from offering generous interest crediting rates to participants; An overly broad definition of interest credits that could disallow many required and permissible credits for imputed service or for periods of disability and maternity leave; A inappropriate application of the special vesting rules to benefits determined under non-hybrid plan formulas resulting in faster vesting; and The exclusion limited applicability of the PPA's indexing rule that would disallow cash balance and pension equity plans from complying with the age discrimination test by meeting its requirements." (The ERISA Industry Committee)

[Guidance Overview] Cash Balance Conversions and Other 'Greater of' Formulas
Excerpt: "Guidance is expected to be issued that will allow separate testing with respect to cash balance conversions like the one analyzed in Rev. Rul. 2008-7 and other 'greater of' formulas under proposed regulations that will be effective for plan years beginning on and after January 1, 2009. Unfortunately, it is not clear what kind of 'greater of' formulas the IRS intends to approve in these regulations and it is possible that Rev. Rul. 2008-7 is a prequel to regulations that will only provide relief to 'greater of' formulas that satisfy narrow design criteria." (BNA Tax Management Inc.)

[Opinion] Pension Rights Center Letter on Treasury Ruling that Threatens Pensions of Thousands (PDF)
5 pages. Excerpt: "The Department of the Treasury and the Internal Revenue Service have issued a ruling that could result in devastating losses of pension benefits for thousands of older employees, contrary to the intent of Congress. The ruling also contradicts current tax law and a long-standing regulation. In a letter sent to Treasury Secretary Henry Paulson today, the Pension Rights Center criticized the agencies for Revenue Ruling 2008-7, which legitimizes a corporate practice known as 'wearaway,' a practice that hurts older workers in certain cash-balance plans and that Congress has recognized as unfair. The Center called on the Treasury Department to withdraw the ruling and alerted the chairs and ranking members of labor and tax committees in Congress to the potential harm that the ruling could have on employees." (Pension Rights Center)

[Guidance Overview] Chart of Highlights of Proposed Rules for Hybrid Plans (PDF)
3 pages. (Prudential Retirement)

[Guidance Overview] IRS Publishes Proposed Regulations for Hybrid Plans (PDF)
6 pages. Excerpt: "These developments affect sponsors of and participants in hybrid plans, such as cash balance plans and pension equity plans. These developments also affect plan sponsors that are considering converting traditional defined benefit plans to a hybrid plan design." (Prudential Retirement)

Employers Turning to Hybrid Plans, DC Plan Enhancements, Wyatt Finds
Excerpt: "During the past 10 years, over forty percent of large employers have closed or frozen their defined benefit plans and replaced them with defined contribution plans, according to a survey released by employee benefits consultant Watson Wyatt. During the same period, nearly one-fourth of the surveyed employers have modified their defined benefit plans into hybrid plans." (Wolters Kluwer)

Lawsuit Targets Pension Plan Change to Cash Balance Formula
Excerpt: "A federal judge has authorized a class-action lawsuit over alleged cuts in pension benefits brought against Solvay Chemicals Inc., one of southwest Wyoming's leading soda ash producers. An attorney for the plaintiffs said employees of Solvay have been invited to join the national class-action lawsuit aimed at fighting changes in the soda ash giant's pension benefits. U.S. District Judge Alan Johnson authorized the class action in the lawsuit filed against Solvay in a Feb. 8 order and ruled that the case could move forward under federal age discrimination laws." (CasperStarTribune.net)

[Opinion] ASPPA Comments on Proposed Regulations Relating to Hybrid Retirement Plans under §411(a)(13) and §411(b)(5) (PDF)
13 pages. Excerpt: "The American Society of Pension Professionals & Actuaries (ASPPA) appreciates this opportunity to comment on the proposed regulations regarding the hybrid defined benefit pension plans as issued by the IRS and Treasury on December 28, 2007 (REG -104946-07) (Proposed Regulations)." (American Society of Pension Professionals & Actuaries)

[Opinion] American Benefits Council Comment Letter to Treasury/IRS on Hybrid Retirement Plans (PDF)
27 pages. Excerpt: "On behalf of the American Benefits Council [the letter contains] comments regarding the proposed regulations providing guidance with respect to cash balance plans, pension equity plans, and other hybrid defined benefit plans." (American Benefits Council)

San Diego Mayor Proposes Hybrid Pension Plan
Excerpt: "Mayor Jerry Sanders is proposing to switch new non-safety employees to a hybrid pension system that includes a lower-paying defined benefit plan, a mandatory 401(a) defined contribution plan and a voluntary 401(k) plan. Under the mayor's proposal, new city employees' benefits would get fewer benefits from the existing $5.05 billion defined benefit plan." (Pensions & Investments)

ADEA Claim in Cash Balance Case Survives Challenge
Excerpt: "A federal judge in Colorado has given participants challenging their employer's cash balance plan a chance to rewrite their lawsuit to better define a potential class of plaintiffs." (PLANSPONSOR.com; free registration required)

[Guidance Overview] IRS Guidance on Accrual Rules in Defined Benefit Plan Conversions (PDF)
2 pages. Excerpt: "The IRS recently issued Revenue Ruling 2008-7, to provide guidance on the application of the accrual rules when a traditional defined benefit plan converts to a cash balance plan or other hybrid plan formula before 2009, and provides a 'greater of' benefit formula. This type of transition formula provides the greater of a participant's benefit as calculated under the original traditional plan formula or his benefit as calculated under the hybrid plan formula. It is designed to prevent an impermissible reduction of participants' accrued benefits." (Prudential Retirement)

Cash-Balance Retirement Plans Are Slow to Catch on Among Employers
Excerpt: "Cash-balance retirement plans may finally be legal -- specifically authorized by the 2006 Pension Protection Act -- but employers aren't racing to enact them. Nearly two years after Congress finally resolved questions about the legality of retirement plans that combine features of defined-benefit pension plans and defined-contribution savings plans, only a few large employers have moved forward with the new 'hybrid' programs." (Human Resource Executive Online)

[Guidance Overview] Summary of Proposed Cash Balance Plan Regulations (PDF)
12 pages. Excerpt: "The Proposed Regulations address the primary changes made by the PPA, including: the general age discrimination standards for hybrid plans, the requirement that hybrid plans credit interest at no more than a 'market rate of return,' the anti-'wear away' protections for plans converting to a hybrid formula after June 29, 2005, the 3-year vesting rule for hybrid plans, and the elimination of 'whipsaw' calculations for lump-sum distributions from hybrid plans." (Groom Law Group)

Solvay Pension Class Action Lawsuit Web Page
Excerpt: "[The Solvay Pension Class Action Lawsuit web page] provides information and court documents relating to the Solvay class action lawsuit about a cash balance pension conversion: Jensen, et al. v. Solvay Chemicals, Inc., et al., C.A. 06-273 (D.Wyo.)." (Stephen R. Bruce)

Changes Proposed for Pension Regulations
Excerpt: "Clearing their desks at the end of the year, federal agencies in December proposed three new regulations that may impact pension plans. The proposals deal with cash balance pension structures, fee disclosures and calculating assets and liabilities. The regulators will review public comments on the proposals this spring." (Employee Benefit News; free registration required)

[Guidance Overview] PBGC Provides Premium Guidance for Defined Benefit Plans (PDF)
4 pages. Excerpt: "These developments affect sponsors of qualified defined benefit plans that are subject to PBGC premium requirements, including cash balance plans and multiemployer plans. Governmental plans and plans sponsored by churches that do not elect to be covered by ERISA ('non-electing church plans') are not subject to these rules." (Prudential Retirement)

Judge Rules Cigna Misled Employees on Retirement Benefits Change
Excerpt: "A federal judge has ruled that Cigna misled its employees about a switch to a new pension plan 10 years ago. Attorneys for the employees in the case say they will now try to recoup hundreds of millions of dollars in retirement benefits for thousands of workers." (AP via Hartford Business Journal)

[Guidance Overview] IRS Provides Long-Awaited Guidance on Backloading Rules
Excerpt: "Here we'll examine the Revenue Ruling 2008-7 published February 1, by the IRS. It provides long-awaited guidance on the so-called 'backloading' or accrual rules for defined benefit pension plans with multiple formulas." (JPMorgan)

[Guidance Overview] Discussion of Proposed IRS Cash Balance Regulations
Excerpt: "At the end of last year, the IRS published regulations under the cash balance provisions of the Pension Protection Act (PPA). The proposal provides guidance on the PPA cash balance plan vesting requirement, age discrimination 'safe harbor,' conversion protection and permitted interest crediting rates. In this article, we review the proposal." (JPMorgan)

[Guidance Overview] IRS Guidance on Applying Backloading Rules to 'Greater Of' Formulas
Excerpt: "The IRS has issued Revenue Ruling 2008-7 to explain its position on applying the antibackloading rules to certain cash balance conversions and to provide limited relief for plan years beginning before January 1, 2009." (Deloitte)

[Guidance Overview] IRS Validates Most 'Greater-Of' Pension Formulas (PDF)
2 pages. Excerpt: "If eligible for relief, plan sponsors that relied on testing each formula separately should be prepared to demonstrate that the separate formulas can pass one of the tests (or if eligible to do so, retroactively amend the plan to correct the offending formula(s)). If ineligible for relief, plan sponsors should . . . ." (Milliman)

Treasury Validates Some Pension Rollbacks
Excerpt: "Under pressure from employers, the Treasury issued a ruling that allows companies to freeze the pensions of older workers in certain cases without running afoul of laws meant to protect employees' nest eggs." (The Wall Street Journal)

[Guidance Overview] Feds Offer Cash Balance Conversion Relief
Excerpt: "New guidance issued by the Treasury Department and the Internal Revenue Service (IRS) provides that cash balance conversions that have filed for an IRS determination letter, and occur before next year, won't be disqualified solely for relying on traditional conversion rules.' (PLANSPONSOR.com; free registration required)

[Guidance Overview] Converted Pension Plan Satisfied 'Backloading' Rules
Excerpt: "A defined benefit plan that converted from a traditional pension plan to a cash balance plan, prior to the effective date of the new conversion rules under the Pension Protection Act of 2006 (P.L. 109-280), satisfied the accrual rules of Code Sec. 411(b)(1) (commonly referred to as 'backloading' rules) for the 2002 plan year." (CCH Incorporated)

[Official Guidance] IRS Rev. Rul. 2008-07: Backloading Rules as Applied to Traditional DB Plan Converting to Cash Balance Plan Prior to PPA '06 (PDF)
Analyzes a hypothetical traditional pension plan that was converted into a cash balance pension plan prior to the effective date of the new conversion requirements under the Pension Protection Act of 2006. In the ruling participants had their pensions determined using the greater of (1) the benefit under a continuation of the pre-conversion plan formula for a limited number of years after the conversion date and (2) the benefit under the new cash balance formula. The ruling illustrates how, under the current regulations, the backloading rules apply to this scenario. The ruling provides relief to ensure that plans that have requested or received a determination letter from the IRS and certain other plans will not be disqualified for plan years beginning before January 1, 2009 solely because the plan provides benefits based on the greatest of two or more formulas. Treasury and the IRS anticipate proposing amendments to the regulations that will allow separate testing of backloading with respect to the scenario under the revenue ruling and other 'greater of' formulas. The regulations will be proposed to be effective for plan years beginning on or after January 1, 2009. (Internal Revenue Service)

[Guidance Overview] Another Court Determines Cash Balance Plan not Age Discriminatory
Excerpt: "Yet another legal victory has been won for cash balance plans as the U.S. District Court for the District of Connecticut has ruled a cash balance plan's interest accrual and conversion formulas are not age discriminatory." (PLANSPONSOR.com; free registration required)

[Guidance Overview] IRS Proposed Regulations on PPA Requirements for Hybrid Plans
Excerpt: "The PPA requires conversions after June 29, 2005, to take an A+B approach (where 'A' is the benefit based on the pre-conversion formula, taking into account service up to the conversion, and 'B' is the benefit under the new cash balance formula, taking into account only post-conversion service). The proposed regulations apply this requirement to section 411(d)(6)-protected benefits earned before and after the conversion." (Watson Wyatt Worldwide)

[Guidance Overview] IRS Proposed Rules for Cash Balance and Other Hybrid Pension Plans (PDF)
2 pages. (Milliman)

[Guidance Overview] Overview: Proposed Cash Balance/Hybrid Plan Regs Issued by IRS
Excerpt: "Under the proposed regulations, a plan would not violate rules regarding a participant's accrued benefit derived from employer contributions merely because the plan determines the present value of benefits under a lump sum-based benefit formula as the amount of the hypothetical account maintained for the participant, or as the current value of the accumulated percentage of the participant's final average compensation under that formula." (Wolters Kluwer Financial Services)

Overview: IRS Proposes Regulations on Cash Balance and Other Hybrid Retirement Plans (PDF)
10 pages. Excerpt: "The IRS has issued proposed regulations on cash balance and other hybrid defined benefit pension plans. The benefits community has long awaited the release of these regulations, which provide guidance on some of the most important provisions in the Pension Protection Act of 2006 affecting defined benefit plans." (Hewitt Associates)

Experts Cite Cash Balance Growth As Reason to Adopt Defined Benefit Model
Excerpt: "An increasing interest by employers in cash balance plans has service providers and consultants offering new tools to the sponsor market. John Hancock, a long-time provider of 401(k) plans, announced recently it was wading into the defined benefit space primarily because of increasing interest in cash balance plans from professional-dominated firms and small companies." (Employee Benefit News; free registration required)

Overview: IRS Issues Proposed Regulations on Hybrid Plans
Excerpt: "IRS issued proposed regulations relating to new Code Sections 411(a)(13) and 411(b)(5), which were added by PPA to enable cash balance and other hybrid plans to satisfy age discrimination and certain other qualification requirements. The regulations incorporate the transitional guidance provided in Notice 2007-6, adopt new terminology to take into account situations where more than one benefit formula is utilized by a plan, and provide additional guidance, taking into account public comments received. 72 FR 73680 (December 28, 2007)." (Deloitte via BenefitsLink.com)

Overview: IRS Proposed Hybrid Plan and Pension Asset Rules
Excerpt: "The notice of proposed rulemaking, which incorporates guidance previously given in IRS Notice 2007-6, implements the hybrid plan provisions of the Pension Protection Act of 2006. The rules would take effect for non-union plans in plan years starting on or after Jan. 1, 2009." (The National Underwriter Company; free registration or paid subscription required)

New Retirement Age Rule Does Not Change Ruling on Plan's Definition, According to Court
Excerpt: "The U.S. District Court for the Northern District of Illinois has determined that a new regulation governing the definition of normal retirement age does not change its earlier ruling that a cash balance plan did not violate the Employee Retirement Income Security Act (ERISA) by defining normal retirement age in terms of vested years of service." (PLANSPONSOR.com; free registration required)

Opinion: Decision in Cash Balance Conversion Case May Have Missed the Boat
Excerpt: "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 they found neither of the participant's arguments persuasive." (Pension Protection Act Blog)

Cash Balance Plans: What Do They Mean for Retirement Security?
Excerpt: "The conversion of traditional defined benefit plans to cash balance plans is among the most controversial aspects of pension policy today. Because the controversy has focused on the treatment of older workers, however, the debate has generally ignored the long-term implications for retirement security. In fact, cash balance plans can often provide more retirement security than traditional defined benefit plans or defined contribution plans, especially for workers who change jobs frequently." (Urban Institute)

Audio: December 12th PLANSPONSOR 'Plugged In' Web Cast Took a Look at Recent Developments in Cash Balance Plans
Excerpt: "Listen in on the discussion between[:] Nevin Adams Editor-in-Chief of PLANSPONSOR; Mark Davis from KDS Advisors; Fred Reish Managing Director and Partner, Reish Luftman Reicher & Cohen; along with special guest, Daniel Kravitz , President, KRAVITZ." (PLANSPONSOR.com; free registration required)

Court Dismisses WaMu Cash Balance Plan Discrimination Claim
Excerpt: "The U.S. District Court for the Western District of Washington has dismissed claims by a group of Washington Mutual employees that the company's cash balance plan benefit formula discriminates against participants based on age." (PLANSPONSOR.com; free registration required)

Overview: IRS Proposes Regulations on New PPA Rules for Cash Balance and Other Hybrid Plans
Excerpt: "The proposal leaves several issues open, pending feedback from the public. The IRS has not exempted any opening balance conversions from the prohibition against wear-away, but solicits input on how such an exemption might be structured. In addition, the proposal offers no specific guidance for pension equity plans (PEPs) but asks for comments on various PEP issues. (The IRS has not yet opened the determination letter process for PEPs.)" (Mercer LLC; free registration required)

Overview: Proposed IRS Regulations on Cash Balance and Other Hybrid Defined Benefit Plans
Excerpt: "The proposed regulations generally apply to defined benefit plans under which any or all of a participant's accrued benefit is based on the balance of a hypothetical account maintained for the participant or an accumulated percentage of the participant's final average compensation (applicable defined benefit plans). They describe a safe harbor protecting such plans from liability for age discrimination in the calculation of accumulated benefits. If each individual's accumulated benefits can never be less than that of a similarly situated, younger participant, the safe harbor is satisfied." (CCH Incorporated)

Text of Proposed IRS Regs on Cash Balance and Other Hybrid Defined Benefit Plans (PDF)
22 pages. (Internal Revenue Service)

GA County Goes from DC to Hybrid Pension Setup
Excerpt: "Government officials in Fayette County, Georgia, have decided to convert the defined contribution plan for county employees into a hybrid plan design.' (PLANSPONSOR.com; free registration required)

Japan Looking to Cash Balance Plans for Pensions
Excerpt: "PlanSponsor.com's NewsDash has an interesting story about how Japanese plan sponsors are looking towards cash balance plans to protect against market volatility for workers' pensions:" (Workplace Prof Blog)

The PPA -- Changes for Defined Benefit Plans and Giving Life to Cash Balance Plans
Excerpt: "Changes wrought by the Pension Protection Act of 2006 (PPA) are sweeping through the defined benefit (DB) industry, requiring just about every plan to rethink plan design and funding. The new PPA funding rules for DB plans will become effective on January 1, 2008. Therefore, by the end of this year, sponsors need a clear strategy for funding, and dealing with the ramifications of the plan's funded status . . . ." (PLANSPONSOR.com; free registration required)

Citigroup Ordered by Federal District Judge to Change Cash Balance Payment Credits
Excerpt: "The latest ruling from U.S. District Judge Shira A. Scheindlin of the U.S. District Court for the Southern District of New York followed her order a year ago that the Citigroup cash balance program violated the Employee Retirement Income Security Act's (ERISA) anti-backloading rules . . . ." (PLANSPONSOR.com; free registration required)

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