Regulations update hybrid defined benefit plan rules
On Monday, the IRS released final and proposed regulations providing guidance on so-called hybrid defined benefit pension plans (T.D. 9693 and REG-111839-13). The regulations deal with changes made by the Pension Protection Act of 2006, P.L. 109-280, and the Worker, Retiree, and Employer Recovery Act of 2008, P.L. 110-458. The Pension Protection Act modified the Sec. 411(a) minimum vesting standards and the Sec. 411(b) accrual requirements.
A hybrid defined benefit pension plan is generally a defined benefit plan under the terms of which the accumulated benefit of a participant is expressed as the balance of a hypothetical account maintained for the participant or as the current value of the accumulated percentage of the participant’s final average compensation (or is a plan that uses a formula that has an effect similar to this). Read more on the Journal of Accountancy.