Lock it up: ensuring the payment of nonqualified pension plan benefits

Article Abstract:

Use of arrangements that provide an additional measure of security, such as a combination of rabbi and secular trusts, may be the most effective way to defer compensation in a nonqualified plan without triggering current income taxation. The IRS applies the constructive receipt doctrine, the economic benefit doctrine and IRC section 83 to nonqualified deferred compensation plans to decide whether current taxation is appropriate. Rabbi/secular trust arrangements should be drafted so that the triggering event will occur early enough so that transfers would not be voided under bankruptcy law.

Methods, Income tax, Deferred compensation

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The reality of fundamental tax reform for employment-based retirement plans

Article Abstract:

Tax reformers need to sensitive to the important role that employer-provided retirement plans play in the economy as well as the important role that tax incentives play in encouraging the formation of benefit plans. Benefit plans offer employers some non-tax advantages, such as reduction in worker turnover, but tax-favored treatment of both contributions and distributions are central to the success of employer plans. Some of the tax reforms proposals being considered preserve employee tax benefits, but most adversely impact the set of incentives that employers face.

Public Finance Activities, Personal Income Taxes, Taxation, Tax reform, Personal income tax, Employee benefits

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Cash balance: the defined-benefit hybrid

Article Abstract:

Cash-balance pension plans are hybrid defined-benefit plans offering cost savings and featuring easily explained designs similar to defined-contribution plans. Traditional defined-benefit plans can be converted to cash-balance plans, providing employers with funding flexibility, limited investment liability, and other advantages not available in defined-contribution plans. Cash-balance plans can give credit for past service, while simultaneously providing more portable cash benefits for employees.

Innovations, Defined benefit plans

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