Category Archives: Defined Benefit Pension Plans

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Four misconceptions about fiduciary liability insurance

With the increasing spotlight on fiduciaries and their responsibilities for ERISA plans, many employers are asking themselves whether it’s time to buy fiduciary liability insurance. With personal assets on the line for breach of fiduciary responsibility, there is no “one size fits all” answer. But, if you are a fiduciary considering fiduciary liability insurance, here … Continue Reading

The other union benefit crisis: multiemployer (Taft-Hartley) plans

The political and often emotional debate over unions continues to escalate, a timeline for which is reported in the Washington Post’s article, Protests Over State Budget Cuts, Anti-Union Bills Spread Throughout U.S. The focus, of course, is public employee unions. But flying under the radar – or rather limping – are the issues affecting multiemployer benefit … Continue Reading

Federal and State agencies “T”ing up employers for worker misclassification

 A "T", or technical foul, is part of the game of basketball. If you’re a fan of the game, you know it’s any infraction of the rules which doesn’t involve physical contact such as unsportsmanlike conduct.  The retirement plan equivalent of a "T" is when an employer misclassifies a worker in situations regarding whether: The worker is … Continue Reading

“When I’m Sixty-Four”… Eh, better make that 75

When I’m Sixty-Four is, of course, one of the classic songs by The Beatles, written by Paul McCartney (credited to Lennon/McCartney) and released in 1967 on their Sgt. Pepper’s Lonely Hearts Club Band.  The theme is about aging with a young man singing to his lover about his plans of them growing old together. It was also one of … Continue Reading

Geraldine Ferraro’s ERISA legacy

Geraldine Ferraro who died yesterday at age 75 was a political trailblazer.  She was, of course, the first woman named to a major-party presidential ticket when Walter Mondale picked her to be his Democratic party running mate in 1984. But while the Mondale-Ferraro ticket lost 49 out of 50 states to the Republican ticket of President … Continue Reading

IRS announces 50% fee discount to “fix” plans not timely amended for EGTRRA

 Retirement plans can get get pretty complicated also, but "fixing" one doesn’t necessarily have to be. That’s the focus of the recent IRS announcement reaching out to employers who did not timely amend their Plans for EGTRRA. Here’s the background. Most retirement plans had to be amended and restated no later than April 30, 2010 to … Continue Reading

New DB(k) plan two sides of the same retirement plan

There’s a new retirement plan design available, and it’s called a DB(k) Plan. What exactly is it? As the name and visual metaphor suggest, it’s a combination retirement plan that allows an employer to provide both 401(k) benefits and pension benefits (traditional defined benefit or Cash Balance). DB(k) Plans were added to the Pension Protection … Continue Reading

Key dollar limits on contributions and benefits remain unchanged for 2011

Every year the Internal Revenue Service announces the cost-of-living adjustments applicable to qualified retirement plans for the following year. The limits will remain unchanged for the second consecutive year.   Following are the key retirement plan limits for 2011 recently announced by the Internal Revenue Service: 401(k) and 403(b) Deferrals: $16,500 Catch-Up for Age 50 and … Continue Reading

Investment returns of defined benefit plans and defined contribution plans: which type did better and does it matter?

Defined benefit plans and defined contribution plans – "apples and oranges" , right? Conceptually, yes. In a defined benefit plan, it’s the employer who has to fund the promised benefit, but it’s the employee who contributes and generally invests his or her account in a defined contribution plan, e.g., 401(k). But in the real world … Continue Reading

“Watching the Detectives”: The ERISA version

That’s Declan Patrick MacManus pictured above, but we know him by his stage name Elvis Costello, the English singer-songwriter of Irish heritage. The picture is actually the cover art for Watching the Detectives, the 1977 single by Elvis Costello and his backing band, the Attractions, which gave him his first UK hit single. It’s my … Continue Reading

Comparing and contrasting retirement plans for business owners

For a business owner choosing a retirement plan, it’s kinda like those compare and contrast essay questions on college exams. Except this time, it’s real life and a lot more complicated than the venn diagram pictured above. Fortunately, our friend Denise Appleby at her Appleby Retirement Dictionary has provided a handy and comprehensive chart comparing … Continue Reading

The Woulda, Coulda, Shoulda of retirement tax planning

I was thinking recently about the late Shel Silverstein (September 25, 1932 – May 9, 1999). He was an incredibly talented Chicago guy whose creativity reached across the socio-economic spectrum as a poet, singer-songwriter, musician, composer, cartoonist, screenwriter and author of children’s books. (And no, dear, it wasn’t about me running out and getting a … Continue Reading

The ERISA plan document shouldn’t be maybe yes, maybe no

 No disrespect intended to the attorneys for beginning this post with a cartoon from the creative mind of Terry Hart, a/k/a, Hartboy. Rather, it’s intended as an excellent visual metaphor for my takeaway from the recent article written by our friend (and attorney) Andy Williams on his Benefits Law Group of Chicago website. Andy writes … Continue Reading

Hard times shouldn’t mean soft ERISA compliance

Our friends at Employee Benefit News Legal Alert published one of those "must read" articles. Attorney Cynthia Marcotte Stamer writes Tough Times Are No Excuse for ERISA Shortcuts. Ms. Stamer correctly points out that irrespective of the business hardships that plan sponsors are facing, the Department of Labor (DOL) will aggressively pursue enforcement if they … Continue Reading

The 2009 Retirement Plan in Review: The Good, The Bad, and The Ugly

    It’s that season of the year. No, not the obvious holiday season, but the award show season. And I’ve got my own called, The Retirement Plan Year in Review: The Good, The Bad, and The  Ugly. The reference is, of course, to Sergio Leone’s classic 1966 movie, considered the greatest of the Italian … Continue Reading

Defined Benefit Pension Plans: What’s Old Is New Again and Better Than Ever

Our blogging buddy, attorney Bob Toth, blogging from a ski slope in Quebec province, discussed the demise of defined benefit pension plans, Continuing the DB Demise Discussion. He notes that there are only 19,000 defined benefit plans now being covered by the PBGC. The context in which Bob writes is what is generally perceived to … Continue Reading

Save Your Retirement: What to Do If You Haven’t Saved Enough or If Your Investments Were Devastated by the Market Meltdown (Book Review)

The Employee Benefit Research Institute (EBRI), an independent non-partisan research organization, in their annual Retirement Confidence Survey (RCS) has been asking workers how confident they are in having enough money for a comfortable retirement since 1993. And in today’s economy, it should be no surprise that EBRI reported The 2009 Retirement Confidence Survey: Economy Drives … Continue Reading

2010 retirement plan limits unchanged but have future implications

Most annual retirement plan limits are indexed to inflation; and because of the decline in the Cost of Living Index in 2009, many of the limits remained unchanged for 2010. Following are the key retirement plan limits for 2010 as announced by the Internal Revenue Service. 401(k) and 403(b) Deferrals: $16,500. Catch-Up Limit (Age 50 … Continue Reading

Treasury issues new Retirement and Savings Initiatives

In a recent series of three Revenue Notices and four Notices the Treasury Department issued Retirement Savings & Initiatives to help Americans save for the future. The new Initiatives: Expand automatic enrollment in 401(k) and other retirement savings plans Create easier ways to save tax refunds Allow unused leave to be converted to 401(k) savings … Continue Reading

2009 Form 5500 not just about new disclosures – it’s also about electronic filing

Form 5500 isn’t just transforming disclosures as our friend and fellow blogger, Bob Toth, explained in his post 2009 Form 5500 Schedules A and C Will Create New Fiduciary Burdens For Plan Sponsors. The reporting road will be also be different, and there will be red flags along the way. Here’s why.… Continue Reading

Increase in bankruptcies calls attention to creditor protection aspects of retirement plans

Bankruptcy cases increased approximately 35% for the 12-month period ending June 30, 2009 , according to statistics released by the Administrative Office of the U.S. Courts. The number of cases went from 967,831 to 1,306,305. These statistics call attention to one of the often overlooked aspects of a retirement plan – protection from bankruptcy. It’s … Continue Reading