Independent Actuaries Blog Category: Defined Benefit Plans

A Cautionary Tale of Low Interest Rates with Lump Sum Distributions

Defined benefit plans can offer lump sum distributions to participants when they terminate employment. This option is common as a method for plan sponsors to lessen administrative costs and offer portable benefits. The lump sum is equal to the present … Continue reading

PPP Loans and Retirement Contributions

The hugely popular Payroll Protection Program (PPP) provides loans to small businesses that are ultimately forgivable if the funds are used to cover payroll costs and other specified expenses within the eight weeks following receipt of funds, so long as … Continue reading

DB Plans – Close vs. Freeze vs. Termination

In a recent blog we discussed concerns that defined benefit (DB) plan sponsors may have in the face of the COVID-19 outbreak. One of those concerns regards near-term contribution requirements that may be overly burdensome when coupled with severely reduced … Continue reading

CARES Act – Defined Benefit Plans

The Coronavirus Aid, Relief and Economic Security (CARES) Act passed the House of Representatives today and is expected to be signed by the President shortly. The CARES Act includes pension relief provisions that have an immediate effect on defined benefit … Continue reading

Defined Benefit Plans Can Get Sick, Too

As has been well-publicized, the Coronavirus (along with other factors) has resulted in a steep financial market plunge this week. As of the day I’m writing this, the S&P 500 is down nearly 24% since the beginning of 2020, with … Continue reading

Congress Passes Retirement Legislation

Yesterday (December 19), Congress passed a spending bill containing sweeping retirement plan legislation, designed to allow and encourage Americans to save more. The portion of the legislation pertaining to retirement is called the Setting Every Community Up for Retirement Enhancement … Continue reading

Changes in Pension Accounting Standards Taking Effect this Year

The soon-to-be-effective Accounting Standards Update (ASU) 2017-07 makes changes to the way pension plans are accounted for, designed to improve the transparency of pension plan operational costs. Under the old rules, all components of pension-related expenses were aggregated together as … Continue reading

Beneficiary Designations: Whose Responsibility is it?

When it comes to Retirement Plans it can sometimes be confusing who does what and whether the responsibility falls on the Employer/ Plan Sponsor, third party administrator (TPA), recordkeeper or the participant. When it comes to beneficiary designations most plan … Continue reading

IRS Announces Retirement Plan Limits for 2019

The IRS has announced the new retirement plan limits for 2019. Most limits increased from 2018 to 2019, and some stayed flat. Highlights include: The compensation limit used in determining benefits and contributions for both defined benefit and defined contribution … Continue reading

Tax Reform and Retirement Plans

We’re getting a lot of questions these days about how the proposed tax reform bills might impact retirement plans. For reference, this Forbes article provides a good summary and comparison of current law versus the House and Senate bills. Here … Continue reading