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DB/k Plans - The Swiss Army Knife of Retirement
Plans
Defined Benefit Plans 2010 - Back To the Future?
A New Era in Retirement Plan Design has Begun!
Building on the
phenomenal success of the 401(k) plan since the mid-70's, the newly
authorized combination defined benefit/401(k) will finally restore
balance and risk sharing to private sector retirement funding.
This web site is dedicated to the DB/K Plan, its history, and its
likely development as the new predominant form of retirement plan in
the United States for small employers.
Prepared by the Staff
of the
JOINT COMMITTEE ON TAXATION
August 3, 2006 JCX-38-06
In general
The provision provides rules for an “eligible
combined plan.” An eligible combined plan is a plan: (1) that is
maintained by an employer that is a small employer at the time the
plan is established; (2) that consists of a defined benefit plan and
an “applicable” defined contribution plan; (3) the assets of which
are held in a single trust forming part of the plan and are clearly
identified and allocated to the defined benefit plan and the
applicable defined contribution plan to the extent necessary for the
separate application of the Code and ERISA; and (4) that meets
certain benefit, contribution, vesting and nondiscrimination
requirements as discussed below. For this purpose, an applicable
defined contribution plan is a defined contribution plan that
includes a qualified cash or deferred arrangement (i.e., a section
401(k) plan). A small employer is an employer that employed an
average of at least two, but not more than 500, employees on
business days during the preceding calendar year and at least two
employees on the first day of the plan year.
