State:
Free Special Resources
Get Your FREE Special Report. Download Any One Of These FREE Special Resources, Instantly!
Featured Special Report
Claim Your Free Cost Per Hire Calculator
This handy calculator lets you plug in your expenses for recruiting, benefits, salaries, and more.

Graphs automatically generate to show you your annual cost per hire and a breakdown of where you are spending the most money.

Download Now!
February 03, 2004
Treasury Proposes Plan for Cash-Balance Pensions

Under a Treasury Department proposal that could make it easier for employers to move to cash-balance pension plans, pensions that are converted to a cash-balance plan would be required to offer benefits that are at least equal to those of the traditional plan, for a period of five years after the conversion, Reuters reports.

For a Limited Time receive a FREE Compensation Market Analysis Report! Find out how much you should be paying to attract and retain the best applicants and employees, with customized information for your industry, location, and job. Get Your Report Now!

In traditional pension plans, workers generally accrue benefits at a greater rate as they near retirement. In cash-balance plans, workers accrue benefits more evenly throughout their careers, the news organization notes.

When companies began converting to cash-balance plans, older workers complained that it was discriminatory because their benefits declined.

The Treasury's plan would require that benefits after a cash-balance conversion be at least equal to those of the traditional plan for five years after the conversion. In order to enforce the rules, the department said it would use a 100-percent excise tax for gaps between benefits required and those offered, Reuters reports.

"We believe that, faced with such an excise tax, employers will provide the benefits required under the proposal," the Treasury said.

The department announced the plan in President Bush's budget proposal for 2005.

Link


Featured Free Resource:
Cost Per Hire Calculator
   
   
 
 
Twitter  Facebook  Linked In
Follow Us
CT-WEB06
Copyright © 2016 Business & Legal Resources. All rights reserved. 800-727-5257
This document was published on http://Compensation.BLR.com
Document URL: http://compensation.blr.com/Compensation-news/Benefits-Leave/Employee-Benefits/Treasury-Proposes-Plan-for-Cash-Balance-Pensions/