Cash Balance Plans (CBPs) have seen strong growth in the past 10 to 15 years: In 2010 there were 7,064 CBPs active in the United States. That’s an increase of 810% over the 1,337 counted in 2001.

However, some companies have hesitated to offer these hybrid defined-benefit plans because they require the employer to contribute both “principal” and interest credits annually to participating employees’ accounts. Although both types of contributions provide dollar-for-dollar reductions in the company’s taxable income, funding the interest credits remains a concern for some.

The majority of firms offering CBPs base their interest-credit calculations on a fixed rate for 10-year or 30-year U.S. Treasury bonds. The challenge for these plan sponsors each year is to invest the funds in their CBPs so as to achieve a higher rate of return than their chosen bond yield.

As bond rates have trended downward in recent years (sometimes nearing historic lows), many CBPs’ investment returns have topped them solidly. Still, the requirement of delivering a guaranteed rate to participants’ accounts has been a key reason many companies have held back on starting their own CBPs.

The good news for these (and all other) employers is that the IRS for several months has been considering regulations that would give them greater flexibility in calculating interest credits for CBP accounts.

The effects of the medication last up to 6 hours of intake. viagra on line Whether erectile dysfunction is present in men or in women, it certainly causes much strain in cialis generika 10mg the relationship. Keep in mind that impotence may be caused by other more serious health issues also. viagra online Old people also have lusty desires for making love-life enjoyable viagra online doctor but there is something which goes wrong with it, the problem then brings several relationship problems to you.
For example, one proposal would allow the employer to base interest credits on the actual rate of return achieved by assets in the CBP. The IRS would require that those assets to be spread over a sufficiently diverse portfolio of investments in order to minimize risk.

Another option would allow plan sponsors to tie their interest-credit rate (ICR) to the rate of return offered by a registered investment provider such as a mutual fund, assuming that their fund or vehicle is reasonably expected to be less volatile than the U.S. equity market or a broad international market.

A third choice for employers: base their ICR on a fixed rate of up to 5%, or an annual minimum rate of 4% in combination with a “safe harbor” rate defined by the IRS.

While none of these rules has been finalized (indeed, any of them could still change or might not be approved), these proposals appear to make it more likely that more companies — including those concerned about meeting annual interest-credit requirements — will begin offering Cash Balance Plans in the coming years.