Are Cross-Tested Plans really here to stay???

[Guest Dennis Siko]

What IRS Regs, or Rulings exist that are proof of the future viability of cross-tested plans? What do they say? Dates written.

[MWeddell]

Cross-tested retirement plans are authorized by Treas. Reg. 1.401(a)(4)-8. Until that regulation changes or Congress passes a new law, you're fine.

Back in about 1992-93, cross-tested plans suffered some negative publicity and there appeared to be some momentum to change the law. At that time, the IRS said it thought its regulations shouldn't be changed unless Congress changed Code Section 401(a)(4). Since, then the furor died down and nothing has changed.

Will Congress change it at some point in the future? I don't know but the past 10 months worth of cash balance publicity has convinced me that it's possible for arcane benefits issues to garner Congressional attention with only 1-2 journalists serving as catalysts for change.

[This message has been edited by MWeddell (edited 10-01-1999).]

[Guest]

there are none. who is to say pension plans are here to stay. a few years the comp limit was $235,000, yet they took that away.

you could have 10 year cliff vesting, that was taken away.

I don't even want to discuss family agregation.

the list goes on!

so, you have to play with the rules as they are each year and go with what should be best for your client.