Jump to content

Transfer of assets using IRC section 420


Guest David G
 Share

Recommended Posts

Guest David G

What are the pros and cons of a governmental employer utilizing IRC section 420 to transfer assets out of a defined benefit plan to fund retiree health insurance costs? Traditionally employer has funded health costs on a pay as you go basis and subsidized some retiree health costs. Employer wants to begin subsidizing the costs of survivors of annuitants and is looking at IRC section 420 as a possible funding mechanism. Annuitants and their dependents currently receive some employer subsidy. Has any one’s clients attempted such a transfer. What was the experience like? Are there difficult administrative burdens? Is the immediate vesting requirement under IRC section 420 expensive actuarially? If this is generally a win-win situation, why hasn’t there been a rush for employers to use? Are there any good materials available either in print or on the web?

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...