Considerations in evaluating defined benefit plan alternatives

Article Abstract:

Employers may want to consider switching from a defined benefit plan for their employees to a defined contribution, or 401(k), plan due to constant limits being placed on defined benefit plans. There are several factors that should be considered when making a decision to change plans. The first is how the change will affect the spendable retirement income of employees. This should be done on a demographic basis. Mid-career employees will be more adversely affected than new employees, but there are steps that can be taken in terms of matched contributions to make sure all are treated fairly.

Defined benefit plans

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Savings plan loans

Article Abstract:

Employers with defined contribution plans, mainly of the 401(k) variety, were asked to describe provisions for employee loans from such plans. A group of 260 companies were surveyed, 53% from the manufacturing sector, 44% from the services sector, and 5% from the public sector. Almost half of respondents had 501 to 3,000 employees. Factors surveyed were participant loan parameters; loan processing, modeling and activity; whether loan availability helps attract employees and changes to loan programs.

Defined contribution plans, Employee loans

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Section 403(b) versus 401(k) plans: new legislation, new choices

Article Abstract:

Non-governmental, tax-exempt organizations can sponsor section 401(k) plans starting in 1997 under the Small Business Job Protection Act of 1996. Section 403(b) plans are currently sponsored by many section 501(c)(3) charitable organizations. Some of these organizations will undoubtedly want to reconsider replacing their section 403(b) with a 401(k) plan. Advantages and disadvantages of the two plans are discussed.

Compensation and benefits, Small business, Nonprofit organizations

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