Making Sense of Retirement Plan Layers and Complexities
What Happened
One of the biggest disappointments arising from the issuance of the 403(b) regs has been the inability of employers to effectively terminate their plans. At first, the IRS caused quite a favorable stir when it announced that the regs would specifically classify the termination of a 403(b) plan as a distributable event, and…
The Green Book, published May 11 by the Treasury Department, contains further details on Obama’s workplace pensions first described in his budget proposals (on which we blogged in March). See pages 7-9 of the Treasury report for details.
It really does create a new scheme of individual pensions, much akin to the 403(b) arrangements…
Just when I thought I was going to get a chance to talk a bit about annuities again, the IRS drops a bomb: it has proposed the design of its long awaited 403(b) prototype program and List of Required Modifications. Announcement 2009-34 is the description of the prototype program; and the LRMs can be…
Evan and I spoke at the ALI-ABA’s Advance Law of Pensions this past week in San Francisco, probably the leading seminar for experienced employee benefit lawyers in the country. Our topic was "Getting Over The Hump," a 403(b) guide for the non-403(b) practitioner. We’re checking with ALI-ABA for permission to publish our paper and PowerPoint…
One of the most unfortunate and unintended consequences of the new 403(b) regulations is the freezing of hardship distributions and loans from contracts of "deselected" vendors, at a time when these funds are needed the most.
What at first seemed like an almost esoteric, academic discussion of what to do with contracts which were issued…
We recently blogged on the similarities between the Automatic Workplace Pension being proposed in President Obama’s budget proposal and the original concept of the retirement programs under IRC section 403(b). We noted that while 403(b) programs were initially set up as individual pension plans, it has been the policy of the IRS for over…
There has been a discussion circulating around Washington for a number of years about the value of establishing a simplified Defined Contribution retirement system commonly referred to as "401(x)". This program would create a single defined contribution program with a single set of rules to replace the "alphabet soup" of DC plans currently in existence.…
I was intending to leave this issue alone for a few weeks, and wait until the Workplace Pension proposal (upon which we blogged a few days ago) had a chance to percolate within the retirement industry. But I had the chance to spend a few minutes with David John (David is a senior scholar at…
President Obama’s new budget proposes the establishment of a new "Automatic Workplace Pension" (see pages 84 and 85 of the OMB’s budget description and David John’s description at the Heritage Foundation’s site). It is based upon proposals from the Retirement Security Project run by Mark Iwry, David John and William Gale.
There is little doubt…
When the IRS extended the deadline for meeting the written plan requirement for 403(b) arrangements from January 1 to December 31, 2009 in Notice 2009-3, it did so with some conditions attached. In particular, the IRS is requiring sponsors to operate their plans during 2009 in accordance with a reasonable interpretation of 403(b) and …