Defined Benefit Plans

News & Analysis as of

Target Benefit Plans and Annuities for Federally Regulated Enterprises

On October 19, 2016, the federal government tabled Bill C-27, which proposes amendments to the federal Pension Benefits Standards Act, 1985 (PBSA). If passed, this bill will allow federally regulated employers to create both...more

Treasury Makes it Easier for Pension Plans to Pay Partial Annuities

The Department of Treasury has issued final regulations that simplify the rules that allow retiring participants to simultaneously elect a partial lump sum and a partial annuity from a defined benefit pension plan. Under the...more

Now You Can Have Your Cake and Eat It Too: New Pension Distribution Rules Allow More Flexibility

If you are one of the lucky few employees who participate in an employer’s defined benefit retirement plan, you previously had to choose between receiving your benefits in a lump sum or in annuity payments. However, in the...more

PBGC Proposed Rule May Offer DC Plans New Tool for Finding Missing Participants

For many years, the PBGC has been helping reunite missing participants with their benefits under single-employer defined benefit plans. Now, a new PBGC proposed rule may open up the program to missing participants under other...more

Brexit: Impact on occupational pension schemes

Following the UK's vote to leave the European Union, we consider the potential implications for employers and trustees of occupational pension schemes....more

The ERISA Litigation Newsletter - August 2016

Editor's Overview - This month’s newsletter features an article on the DOL’s recently published interim final rule that increases penalties for notice and disclosure violations, which generally became effective on...more

Penalties Increased for Employee Benefit Plan Violations

Recently-enacted legislation has increased many penalty amounts for certain employee benefit plan violations. The new penalties – some of which are more than double previous amounts – were adjusted to catch up with inflation...more

Higher ed braces for flood of lawsuits over retirement plans

Numerous colleges and universities sponsor retirement plans—both defined benefit (DB) and defined contribution (DC)—to provide retirement income security for their employees. But recently a number of higher education...more

Ontario Takes Action on Pension Funding Reform

In November of last year, as part of its 2015 Economic Outlook and Fiscal Review, the Ontario government announced its plans to review the current solvency funding rules for defined benefit (DB) pension plans. The expedited...more

IRS issues new rules for 'closed' defined benefit plans

At the end of January, the Internal Revenue Service issued new proposed regulations for so-called “closed” or “frozen” defined benefit plans. The purpose of these regulations is to help plan sponsors satisfy the...more

Individually Designed Retirement Plans and the New IRS Determination Letter Program

A qualified retirement plan (hereinafter a “Plan”) must satisfy the requirements of the Internal Revenue Code (“IRC”) in form and in operation. In other words, the documents establishing and governing the Plan must satisfy...more

Pension Fund Health-Check Required

The recent furore over the collapse of high street retailer BHS has caused fierce debate over whether companies, or their ultimate owners, are responsible for the upkeep of a pension plan. For private equity, the debate has...more

IRS Issues Guidance on Determination Letter Program

The Internal Revenue Service (IRS) has recently issued detailed guidance on the new determination letter program for tax-qualified retirement plans. In 2015, the IRS announced that, due to budgetary constraints, the program...more

IRS Issues Clarification on Phased Retirement Payments

Typically, when a participant receives annuity payments from a defined benefit pension plan where he or she has a basis in the benefit (what Code Section 72 calls an “investment in the contract”), a portion of the payment is...more

Brexit: The implications for occupational pension schemes

The UK electorate voted to leave the European Union in a so-called Brexit referendum. The initial impact for occupational pension schemes has come from the resulting market volatility, and whilst there is no immediate impact...more

Don’t be Phased by Annuity Treatment: Taxation of Distributions During Phased Retirement

On June 10, the Internal Revenue Service (IRS) issued Notice 2016-39 in response to inquiries regarding the appropriate tax treatment under section 72 of the Internal Revenue Code (the Code) for payments received by an...more

Just Say Sorry

I worked for someone once who I thought was the biggest pain in the rear end and I think when I got older and started my own business, I finally understood where he was coming from. When I work on my own and something...more

Appellate Court Untangles Twelve Year Old Marital Settlement Agreement Regarding Pension

In a 2016 non-precedential appellate court decision, Grothey v. Grothey, the court attempted to untangle an agreement by husband and wife reached in 2004. The agreement provided that wife was to receive 65% of husband’s...more

You can say no

I always believe that regardless of whether it’s business or in regular day-to-day life, that you can’t be everything for everybody. Being honest with that is only half the battle. A lot of times, I met folks who are...more

More DB DC Plan Design Flexibility in Maximizing Benefits for Highly Compensated Employees

Given the subject matter involved, this Alert is very technical and specialized. If your company offers both an active pension plan and a 401(k) or profit sharing plan and performs the general test to satisfy the...more

April 30 Deadline for Pre-approved Defined Contribution Plans

This is a follow-up on the IRS’ recent reminder to plan sponsors using pre-approved defined contribution plans (i.e., prototype and volume submitter plans) that they must adopt restated plan documents by the end of this...more

Department Of Labor Audits Are Focusing On Plan Procedures For Locating Missing Vested Participants

The U.S. Department of Labor (DOL) has increased its examinations of the procedures of defined benefit and defined contribution retirement plans for locating and paying out benefits to terminated vested participants whom the...more

Two Adverse Decisions against Church Plans Reached at Appellate Court Level

In Depth - Since 2013, there have been more than 10 lawsuits filed against various health care systems across the country that maintain and operate defined benefit pension church plans. These suits allege that the...more

DOL Official Says Office Is Investigating Large Defined Benefit Plans Regarding Locating and Paying Terminated Vested Participants

Recent comments from an official with the Department of Labor (DOL) indicate that the DOL’s Employee Benefits Security Administration (EBSA) has begun investigating large defined benefit plans to review how plan...more

Courts Strike Down Church Plan Exemptions for Church-Affiliated Organizations

Until recently, the Internal Revenue Service (IRS), the Department of Labor (DOL), and federal courts seemed to agree that a retirement plan established and maintained by a church-affiliated organization generally qualified...more

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