Cash Balance Pension Plans: Selected Legal Issues

Description:

Over the past few years, cash balance pension plans have received significant attention. In particular, three issues have been controversial: the negative effect of a plan conversion on older employees due to wear-away, the whipsaw effect that may occur when computing a lump-sum payment of benefits prior to normal retirement age, and the claim that these plans violate federal laws prohibiting age discrimination. This report discusses the wear-away and whipsaw issues, a proposal by the Treasury Department that addresses them, and relevant legislation introduced in the 109th Congress (H.R. 2830 and S. 1304).

Creator(s):
Creation Date: July 29, 2005
Partner(s):
UNT Libraries Government Documents Department
Collection(s):
Congressional Research Service Reports
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Place of Publication: Washington D.C., USA
Date(s):
  • Creation: July 29, 2005
Description:

Over the past few years, cash balance pension plans have received significant attention. In particular, three issues have been controversial: the negative effect of a plan conversion on older employees due to wear-away, the whipsaw effect that may occur when computing a lump-sum payment of benefits prior to normal retirement age, and the claim that these plans violate federal laws prohibiting age discrimination. This report discusses the wear-away and whipsaw issues, a proposal by the Treasury Department that addresses them, and relevant legislation introduced in the 109th Congress (H.R. 2830 and S. 1304).

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6 pages.

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Partner:
UNT Libraries Government Documents Department
Collection:
Congressional Research Service Reports
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Resource Type: Report
Format: Text