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Defined benefit (DB) plan sponsors received another “derisking” tool in early March when the Internal Revenue Service (IRS) and U.S. Treasury Department unexpectedly reversed course on retiree lump-sum payouts.
By Jane Meacham While acknowledging that maintaining traditional defined benefit (DB) pensions has become either too expensive or too burdensome, several Fortune 500 company retirement plan sponsors would like to replicate for their defined contribution (DC) plans some of the efficiencies from their DB plans, according to a new survey report from BNY Mellon.
By Jane Meacham The IRS on June 15 released guidance on paying employees from a defined benefit (DB) plan once the participant has entered phased retirement and whether the distributions should be taxed.
Qualifying lifetime annuity contracts in July 2014 became another option for defined contribution plan sponsors to offer to assist with retirement income security when the U.S. Treasury Department and IRS issued final regulations allowing them. Now, plan sponsors and participants near retirement age face some confusing choices when considering whether QLACs are right for their […]
The Pension Benefit Guaranty Corp., in a policy reversal, has agreed to exempt most companies and their pension plans from sweeping “reportable events” requirements first proposed in 2009. This news should be a relief for the many small or financially sound companies with defined benefit plans that had expressed concern about reporting relatively minor business […]
Amid historically low interest rates, the U.S. 7th Circuit Court of Appeals’ recent affirmation of a retirement plan’s choice of discount rate for converting annuities into lump-sum payments to beneficiaries should reassure defined benefit plan sponsors facing similar challenges. In Dennison v. MONY Life Retirement Income Security Plan (No. 12-2407, 7th Cir., March 6, 2013), […]
Three monthly measures of defined benefit pension plans’ funded status slipped or remained flat in February after a strong start to 2013, due mostly to weakening interest rates. The Milliman 100 Pension Funding Index, which monitors funding for the U.S.’s largest corporate DB plans, posted a decrease in funded status for the month to 81.5 […]
Pension liabilities of the 100 largest U.S. corporate defined benefit pension plans decreased by $28 billion in November, while assets increased by $5 billion, bringing the Milliman 100 Pension Funding Index funded status deficit to $466 billion and the funded ratio of 74 percent. The November ratio still lags the year-end 2011 value of 78.7 percent, […]
Large corporations thinking about transferring hefty defined benefit plan payouts to insurance companies for them to manage now have judicial support for that approach. A federal judge in Texas has denied a bid by retired Verizon Communications executives to block the company from making a proposed shift off its books of $7.5 billion in pension […]
President Bush has signed the Pension Protection Act of 2006 into law, which overhauls pension funding rules, clarifies cash balance plan rules, encourages automatic enrollment in 401(k) plans, and much more. The law spans a massive 907 pages, and we describe some of its key provisions here.