Hybrid Pension Plans: Navigating Complex ERISA and IRC Requirements to Minimize Liability Risks

Description

As part of the continuing effort to reduce pension risks, more and more employers are choosing to implement hybrid pension plans.  The Pension Protection Act of 2006 (PPA) clarified many open issues regarding hybrid plans, clearing the way for new adopters of these plans.  Even so, ERISA counsel should approach these types of plans with great care as they involve regulations that govern both defined benefit and defined contribution attributes.

Cash balance and pension equity plans are the most common types of hybrid plans being implemented. Special attention must be paid to many aspects of structuring cash balance and pension equity plans because of the numerous technical rules applicable to these plans. 

The IRS has recently issued final regulations finalizing many of the provisions of the 2010 proposed regulations, but also making significant changes that contain pitfalls for the unwary, as well as potential design opportunities. Many of the changes to the 2010 regulations are effective for plan years beginning on or after January 1, 2016. Provisions from the 2010 regulations that remained unchanged have an earlier effective date of January 1, 2011.

Listen as our esteemed panel examines formation and compliance issues for hybrid pension plans. The panelists will provide a roadmap for navigating the many complex ERISA and IRC regulations that govern the defined benefit and defined contribution features of hybrid plans, as well as litigation issues that arise from hybrid plans.