In a defined benefit plan, the employer promises workers a specified level of income upon retirement.
"I never assumed I'd have a pension, " says Friend, who is a defined benefit plan actuary.
Review benefit options if your spouse had e.g. a defined benefit plan at work.
They say Medicare should be reformed on the model of Congress's own Federal Employees Health Benefit Plan.
If you are fortunate enough to be a participant in a defined benefit plan, the same logic applies.
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This is based on faulty actuarial methodology that speeds up pension contributions when a defined benefit plan is closed.
These may gain strength when a prescription-drug benefit plan is finally approved.
If you have younger employees, a custom-designed defined-benefit plan will allow you to put away big bucks for yourself, and little for them.
But just because a company has frozen or cut its defined benefit plan doesn't mean it is leaving workers to fend entirely for themselves.
In fact, it's a lot fairer than the funding formula in a traditional defined benefit plan, argues Urban Institute retirement and tax policy expert Eugene Steuerle .
The good news is that this same tax law offers a "get out of jail free" card if the executive benefit plan is cleaned up this year.
If your employer makes a mistake with the design of your executive benefit plan, would you expect to have to pay the tax and penalty for the employer?
Therefore, in order to enable it to offer a defined benefit plan similar to the current one, we require the fund to enter into an agreement with the Treasury.
If all your earnings are from your own business and you have lots of income to shelter, consider setting up a solo 401(k) as well as a defined benefit plan.
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To make sure all is well for the executive benefit plan going into the future, executives should make sure that their employers are reviewing existing programs to bring them into compliance.
Various studies by benefits consultant Hewitt Associates show that only 38% of U.S. employers plan to offer a defined-benefit plan by the end of 2006, compared to as many as 83% in 1990.
With a defined benefit plan, the employer put money aside for you in a safe place and, based on your pay and years of service, you were entitled to a pension upon retirement.
Meanwhile, those cashing out of a defined benefit plan are signing up with planners and brokers, seeking advice on decisions like whether it is better to take a lump sum or an annuity payout.
The 401(k) plan accelerated in 1986, when Congress passed legislation permitting the replacement of the defined-benefit plan offered to government workers with a less attractive defined-benefit plan and an attractive defined-contribution plan.
Though employers plan to keep benefits, costs will likely go up on workers as employers tinker with their benefit plan designs by moving to consumer-directed health plans that tend to be tied to high deductibles.
Currently, under the Survivor Benefit Plan (SBP), a military retiree can set aside up to 55 percent of his monthly retirement pay to provide their family members with a monthly stipend, after he or she dies.
Thereafter, the benefit plan will be frozen.
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This shift is nearly complete in the private sector: As of March 2009, 84% of state and local government employees had access to a defined benefit plan, compared to just 21% of private employees (and 16% of nonunion private employees).
Various studies by benefits consultant Hewitt Associates (nyse: HEW - news - people ) show that only 38% of U.S. employers plan to offer a defined-benefit plan by the end of 2006, compared to as many as 83% in 1990.
Last week, the Office of the Inspector General of the Department of Labor issued a report entitled, Changes Are Still Needed in the ERISA Audit Process to Increase Protections for Employee Benefit Plan Participants, which indicates that the Office is gravely concerned about the prevalence of unaudited employee benefit plans.
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To make this move, you have to work for a company that offers both a 401(k) defined contribution plan and a traditional defined benefit pension plan, and offers the option to roll assets from the former (the DC plan) to the latter (the DB pension).
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That the total accrued benefit under the new plan may not exceed the accrued benefit under the old plan for certain employees does not mean that the ADEA is necessarily implicated, and that law was not violated in this case, the judge said.
Ultimately, the sides settled upon a plan proposed by the NFL, wherein the current officials will retain the defined benefit pension plan until 2016, or until the official earns 20 years of service.
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Once upon a time the traditional defined benefit pension plan was a powerful means to lock employees in.
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