This month may see the finalization of IRS regulations that
lay out the steps that must be taken to accomplish cash-balance conversions without violating federal age-discrimination laws.
Nonqualified plans have some disadvantages for both employees and employers
that ERISA-covered plans avoid, the biggest being that the money in these plans
is subject to creditors in the same way as other company assets.
Cash balance plans have lately been the targets of bad press. Opponents complain that these plans reduce benefits, and the only reason companies want them is that they cost less. Are these allegations true or are they misstatements of the facts?
Over 30 years ago, with the collapse of the Studebaker company, Americans in general, and Congress in particular, realized that something had to be done to protect the retirement benefits of American workers.
As if paying bills isn’t bad enough, before paying a bill, plan administrators must first decide whether to use company or plan assets. And it isn’t enough to assume that anything with the word "pension" on the line item can
be charged against the plan.
