Friday, January 21, 2005

DC Rules

If you have a pension plan you should be discussing the final automatic rollover rules with your plan provider. Most providers seem rather late to the party in addressing these requirements..probably because it doesn't provide an opportunity to make a milli0n bucks! Essentially the final regulations ( initial requirement was part of the Economic Growth And Tax ReconciliationAct of 2001) provide a safe harbor for sponsor fiduciaries enaged in automatic rollovers of certain mandatory distributions into individual IRA accounts. I have talked to several large providers who are looking to outsource this business since the economics of small balance IRA's are so poor. The regulation is effective March 28, 2005.

By the way, apparently someone thinks the CALPERs (nuke the DB) Pension Debate Information site, referenced in yesterdays post is a wee bit biased.



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