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EGTRRA Permanency DB Plan Design
Portability DB Investment Consulting DC Plan
Design
We
have discussed both EGTRRA permanency and Defined
Benefit (DB) plan design. Shifting focus back to the
defined contribution side of things, in this issue we
take a look at how the Pension Protection Act (PPA)
affects portability rules.
PPA has increased the portability of retirement assets,
giving participants more flexibility regarding how they
can manage their savings across plan types. As a result,
now is a good time to engage both plan sponsors and
participants to remind them about the portability that
has always been afforded to retirement assets, as well
as to educate them about the increased portability
options now available.
For example, participants who have moved from education
to corporate careers, or the other way around, may not
know or understand that they can roll money from a
403(b) account into a 401(k) account, or vice versa.
Therefore, they are adding complexity to their lives,
managing their retirement savings in two locations, for
no practical reason.
An
opportunity exists for you, as a financial professional,
to show your value to plan sponsors in helping them
understand, and best communicate to their participants,
the portability options available. Educational campaigns
targeted at participants may be an invaluable resource
for plan sponsors. You can also add value in assisting
plan sponsors with any plan design changes that may be
necessary to facilitate the portability of some assets.
And you can get the ball rolling by asking plan sponsors
what programs they are planning on implementing to
educate participants on their portability options. They
may turn the question around and look to you to help
implement a program.
Tune in next time for a tip on taking advantage of DB
investment consulting 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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