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Future of Cross-Tested Plans?


mwyatt

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Posted

Our VP just got back from ASPA and said that the general consesus was that cross-tested plans may be on the way out (given the increased scrutiny of aggressive plans in general owing to the cash-balance episodes of this summer). Anyone care to comment on this opinion (not mine, my boss's - however, a Democratic house in 2001 should surely bury these plans - my view).

Posted

must have attended a different ASPA meeting (just kidding)

I did not get that feeling at all. There is a lot of concern over cash balance and as a result I heard one comment that congress may take another look at cross tested plans. But there didn't seem to be any consensus that they were on the way out - at least not in my opinion.

ASPA is lobbying hard hard on the whole issue, making sure congress understands exactly what is going on in cash balance plans - there is a lot of bad data / misconceptions circulating in Washington

regarding these plans. If anything, the big push is to give some ground on cash balance plans if need be, but that seemed to be the general feeling I got from the meetings.

Posted

A few years back (circa 1993) the IRS made clear that while it supported Congressional action to change cross-testing plans, it felt that 1.401(a)(4)-8 faithfully interpreted the current Code. Any change would have to come from Congress and there's been no proposals that I recall to change the law in this respect.

  • 3 months later...

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