Cash Balance Plans: Changing requirements

[Guest Rachel Hamilton]

What strategies can help minimize risk of breaching fiduciary duty for cash balance?

What is the future of cash balance plans for the employer?

Rachel Hamilton

Senior Industry Consultant

American Conference Institute

Workshop @ http://www.americanconference.com/employme...ns/workshop.htm

[SoCalActuary]

Well, the fiduciary duty of any DB plan is still the normal rule. Prudently invest, follow the terms of the plan, respond timely, give appropriate notices when due, etc.

But a cash balance plan that has special features may have additional issues. If the CB balance is tied to a specific external index, then the plan sponsor has a fiduciary duty to select an appropriate index when designing the plan.

If the index is tied to an equity market value, this duty gets even more specific. Then there are ERISA 404© issues about participant rights.

CB plans are often the only type of DB plan that a plan sponsor will approve in the absense of union pressure once the employee group gets above 10 participants. In that context, CB plans have an excellent future because they meet an specific need.

Further, CB plans are very useful for govt & non-profit employees who would otherwise miss out on coverage.

[david rigby]

Rachel, are you selling something? perhaps trying to advertise a conference?

BenefitsLink is a good place to post an event, http://benefitslink.com/events/