Blinky the 3-eyed Fish Posted August 18, 2006 Posted August 18, 2006 Cash balance plans can now have interest credits no more than a market rate of interest. I was surely hoping it would be the true return of the plan but I haven't been able to get a handle on what is meant by this because of this passage: (III) MARKET RATE OF RETURN.—The Secretary of the Treasury may provide by regulation for rules governing the calculation of a market rate of return for purposes of subclause (I) and for permissible methods of crediting interest to the account (including fixed or variable interest rates) resulting in effective rates of return meeting the requirements of subclause (I). Anyone heard what this will mean? "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
Everett Moreland Posted August 18, 2006 Posted August 18, 2006 The August 3, 2006, Congressional Record, at S8756, includes the following: "Mr. GREGG. . . . . My further understanding is that the term 'market rate of return' is intended to include a fixed rate of interest that is no greater than the yield on long-term, investment-grade corporate bonds at any time during a reasonable period before the rate is first applied under the plan; is this correct? "Mr. ENZI. Yes, it is."
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