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Determinations – Cash Balance Plan Design Issues

Announcement 2009-82
Announces relief for sponsors of statutory hybrid plans that must amend the interest crediting rate in those plans. Plan sponsors may rely on this announcement pending publication of the final regulations and proposed regulations relating to statutory hybrid plans. The regulations will include rules interpreting the requirement in Internal Revenue Code Section 411(b)(5)(B)(i) that such plans not have an interest crediting rate in excess of a market rate of return. The rules in the regulations specifying permissible market rates of return are not expected to go into effect before the first plan year that begins on or after January 1, 2011

Revenue Ruling 2008-07
Provides that whether the fractional rule would be applicable to any given plan would depend heavily on individual participants' compensation history and interest rates credited under the plan and would not necessarily be sustainable for long periods of time.

Relationship between Revenue Ruling 2001-62 and cash balance pension plans
The IRS's position regarding an amendment to a cash balance pension plan adopting the new table set forth in Revenue Ruling 2001-62.

Section 401(a)(26) Issue Arising in Cash Balance Plan Determination Letter Applications
Memorandum addressing questions raised about whether certain newly established defined benefit plans with cash balance formulas provide "meaningful benefits" for employees.

Employee Plans News - November 5, 2010 - Hybrid Defined Benefit Plans - Final and Proposed Regulations
Highlights of recent guidance on hybrid defined benefit plans.

Page Last Reviewed or Updated: 03-Nov-2014