Planning for retirement is not a one-size-fits-all exercise. The purpose of Ballpark is simply to give you a basic idea of the savings you'll need when you retire.
Flexible benefits offer some interesting opportunities for companies enmeshed in the merger and acquisition process, MFBP believes. Mark Manin, senior vice president and national practice leader for flexible benefits at The Segal Co. (New York City), agrees. Manin and Patricia Moore, vice president of HR at the Boston Medical Center, shared their experience with -- and the impact of flexible benefits on -- the merger of Boston City Hospital, a large, public-sector facility, and University Hospital, a private-sector hospital associated with Boston University.Many of the challenges they faced were unique to these two institutions -- multiple labor unions, balancing the needs of nursing staff and service workers, the public/private sector dichotomy. But the lessons they drew from the process -- and shared at the Employers' Council on Flexible Compensation's (ECFC) recent conference in Washington, D.C. -- can be valuable to you if your company is involved in any type of merger or acquisition.
Many tax-qualified plans contain provisions allowing such in-service distributions to older employees as a way of complying with the minimum distribution rules of Code section 401(a)(9). Before 1997, section 401(a)(9) generally required that payments begin to plan participants at age 70-1/2 even if still employed. Starting in 1997, older employees generally can wait until termination of employment to begin receiving minimum distributions. (Minimum distributions, like most plan distributions, are taxable income.) Most plans will want to avoid the expense and hassle of making in-service distributions to older employees now that the tax code generally does not require such distributions. The regulations allow a plan to be amended to eliminate the right of an older employee to take advantage of in-service distribution provisions, under certain conditions.The amendment may be adopted no later than the last day of any remedial amendment period that applies to the plan for changes under the Small Business Job Protection Act, and in no event before December 31, 1998.
An amendment probably should not be made to any plan until the regulation is finalized, even if it were to include all the conditions required under the propoosed reg. The preamble to the proposed regulation states that the "guidance in these proposed regulations . . . will only apply to amendments adopted and effective after [the date that final regulations are adopted]."
In B.C. (Before Computers) days, actuaries determined gain and loss only on a aggregate basis. The formula analyzed changes in the "unfunded." The actuary would calculate the "expected unfunded" and compare that with the "actual unfunded" at the end of the period in question, usually a year.More of the article here.For pension plans, the formula for the gain looked something like this:
(beginning of the year unfunded plus normal cost plus interest on both) minus (actual contributions) minus (the actual year-end unfunded)Actually, this formula persisted in its simplicity into years A.MS. (Anno Bill Gates) because we weren't too concerned with the elements making up the gain. Even ERISA didn't insist on very much more, merely requiring a separation of the gain between experience and amendments.
In the late 80's the IRS got concerned about the discount rates being used, suspecting that low rates were being used to increase deductions. At about the same time, the Financial Accounting Standards Board (FASB) was trying to improve pension cost reporting.
FASB, in particular, began the process of unbundling the unfunded into its components; the Projected Benefit Obligation (PBO) and the assets. FASB also promulgated an additional, previously underutilized, concept - the "unprovided."
QUESTION 36: A reader asks: What is the "required" correction under the IRS' remedial programs for using incorrect compensation amounts when allocating a profit sharing contribution in a 401(k) plan?