2009-10-28
Cash balance plan sponsors should consider whether they need to adopt plan amendments by the end of the 2009 plan year to reflect two provisions of the Pension Protection Act of 2006 (PPA).

The two PPA provisions:

1. Require that interest crediting rates not exceed a "market rate of return"; and
2. Clarify that payment of a lump sum equal to the participant's vested cash balance account satisfies the minimum lump sum requirements of Internal Revenue Code sections 411(c) and 417(e).

As discussed in the Actuarial Advisory linked to at right, it may be prudent to adopt amendments by the end of the 2009 plan year even though the IRS has yet to issue definitive guidance on these issues.

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