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EGTRRA Permanency
DB Plan Design
Portability DB Investment Consulting DC Plan Design
NOW THAT
THE
ink is dry on the Pension Protection Act of 2006 (PPA),
the implications of many of its provisions, both for
Defined Benefit (DB) and Defined Contribution (DC)
plans, are becoming evident.
One noteworthy provision of the PPA for DC plans is the
impact the law has on the provisions of previous
legislation, the Economic Growth and Tax Relief
Reconciliation Act of 2001 (EGTRRA). PPA makes permanent
the provisions under EGTRRA—including increased
contribution limits, catch-up contributions, rollovers
and more—which were previously set to expire in 2010.
EGTRRA permanency creates an opportunity for you to
showcase your value-added services as plan design
consultants. Under PPA, hesitation on the part of plan
sponsors to implement EGTRRA provisions has been
significantly reduced, and sponsors will need guidance
regarding what provisions should be implemented into
their plans, appropriate timetables, etc. You can also
add value by conveying your knowledge of the
capabilities of various providers.
The Roth 401(k)/403(b) feature is a good example of how
you can add value to plan sponsors by consulting on the
appropriateness of including these accounts as part of
their plans. You can illustrate to plan sponsors how
adding these features may provide participants with
added flexibility regarding the types of contributions
they make.
So, consider getting out there and talking to plan
sponsors. Ask them what they expect the impacts of
EGTRRA permanency to be on their plans, and help them
work through the process of making the most of this
provision of the PPA for their participants.
Tune in next time for a tip on taking advantage of
defined benefit plan design opportunities.
Click here to visit MassMutual.
©
2006 Massachusetts Mutual Life Insurance Company,
Springfield, MA 01111. All rights reserved.
www.massmutual.com
MassMutual Financial Group is a marketing designation
(or fleet name) for Massachusetts Mutual Life Insurance
Company (MassMutual) and its affiliates. RS: 10042-00
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