What is the effective date for the DB(k)?

[SteveH]

I just read through the actual text (ok skimmed) of Section 903 of the PPA and didn't see the effective date for when we can combine the DB plan with a 401(k) feature. Has anyone seen that date yet? The summaries I have read all mention that you can do it but don't mention which plan year it becomes effective.

[JAY21]

I thought I read 2008 and even then subject to a "revenue review" by some gov't agency. For what it's worth it seemed fairly restrictive to me on a first blush basis on both the match structure and the DB formula structure required.

[Slider]

The provision is effective for plan years beginning after 12/31/2009. So there's still a way to go.

[SteveH]

I did see that 2009 thing, but I thought that effective date was referring to something with muliple employer plans. It kind of seemed like it had moved on to the next subject. Regardless I have at least a couple years.

We are proposing a DB plan to a client and he wants to keep his 401(k) adminstrator. I wanted to make sure that the DB(k) wasn't in effect for '07 which could have influenced whether or not he should keep his 401(k) administrator.

Thanks guys and/or gals. (political correctness stinks, who would talk like that?)

[Blinky the 3-eyed Fish]

The DB(k) is another thing that stinks. To much in a box to truly fit many, if any, clients.

[SteveH]

Ok I confirmed it from the all knowing Newkirk that it is plans beginning in 2010. I just got their sample booklet that covers the PPA. I wonder why Congress pushed it out that late. I thought they usually created a new law and let it sunset 5 years later. Now they are creating laws that don't go in effect for 5 years.

Anyway Blinky, funny story...

I was doing some research on the board here so that I could answer a question someone asked of me. I found the answer and the person asked where I found it. The only thing that popped in my head (which I didn't say) was:

"Blinky the 3-eyed fish told me."

So I had to go find another source and print it out.

[SoCalActuary]

That response also belongs in the "Humor" forum. Thanks for posting it.

[Guest mjb]

According to the tech explanation of PP (P231-9) the effecitve date for DB/k plan (aka IRC 414(x)) is plan years beginning after 12/31/09. The reason for the delayed enactment date is to push the revenue loss for 414(x) to future yrs (out yrs) so as to avoid a shortfall in the "in" yr ( 2007) when the tax law is scored for budgetary analysis.