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
The 403(b) Regs Experience Exposes “401(x)” Weakness
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.
Marketplace Lessons for Workplace Pensions
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
Obama’s Automatic Workplace Pensions: 403(b) Redux?
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
The New Generation of Annuities: Balancing Flexibility, Stability and the Pooling of Interests
I mentioned in a posting last week that we will take some time on this blog to work through a number of the legal and technical issues related to annuitizing out of 401(k) plans. This, in effect, allows the 401(k) plan to offer the best features of the Defined Benefit and Defined Contribution plans without
IRS Notice 2009-3 Shouldn’t Lead to Complacency
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
403(b) Advisor Checklist
One of the biggest challenges for the benefits professional is trying to weed through all of these new 403(b) rules, and explain them in a meaningful way to their clients. Monica and I wrote this checklist designed specifically for that purpose-to give advisors a tool to use when they need to work with employers on
401(k) Annuities: “Defined Benefit” Guarantees Using a 401(k) Account
It is back to the future, in an odd sort of way. There is growing trade press coverage on the interests of 401(k) plans and plan participants on turning a portion of participants’ account balances into a "defined benefit-like" guaranteed income stream. Follow, for example, this link to Plan Advisor.com.
There are really two ways