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

Complying With Primary Regulations, Reconciling Nondiscrimination, Age Discrimination, Wear Away, Whipsaw Issues and More

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Tuesday, January 6, 2015

Recorded event now available

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Course Materials

This CLE course will provide ERISA counsel with strategies for structuring hybrid pension plans focusing on cash balance and pension equity plans, as well as litigation issues related to these plans. Experienced panelists will review the primary ERISA and IRC requirements and offer guidance on more controversial and complex issues applicable to hybrid plans.


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.



  1. Cash balance plans
    1. Primary requirements
      1. Accumulated benefit/ “A plus B” requirement
      2. Annual credits
      3. Interest crediting rate
      4. Preservation of capital
      5. Vesting
      6. Accrual rules
    2. Nondiscrimination/IRC 401(a)(4)
    3. Controversial issues
      1. Age discrimination
      2. Conversion wear away
      3. Whipsaw/417(e)
    4. Plan amendments
  2. Pension equity plans
  3. Litigation issues


The panel will review these and other key issues:

  • What combination of primary ERISA and IRC requirements are applicable to hybrid pension plans?
  • How do IRC 401(a)(4) nondiscrimination rules apply to cash balance and pension equity plans?
  • What controversial issues plague hybrid pension plans and how can counsel overcome those concerns?
  • How have the IRS final regulations changed compliance requirements for hybrid pension plans?
  • What are the latest developments related to hybrid plan litigation?


Amanda A. Sonneborn
Amanda A. Sonneborn

Seyfarth Shaw

Ms. Sonneborn has considerable experience in ERISA and employee benefits litigation including defense of claims for...  |  Read More

Zaklad, J. Rose
J. Rose Zaklad

Groom Law Group

Ms. Zaklad advises clients on the design and administration of tax-qualified and nonqualified retirement plans. She...  |  Read More

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