Number: RS22214
Title: Cash Balance Pension Plans: Selected Legal Issues
Authors: Erika Lunder and Jennifer Staman, American Law Division 
Abstract: Over the past few years, cash balance pension plans have received significant congressional and public attention. Issues that have been controversial include the negative effect of a plan conversion on older employees due to wear-away, the whipsaw effect that may occur when computing a lump-sum payment of benefits prior to normal retirement age, and the practice of providing the "greater of" benefit to plan participants as part of a conversion to a cash balance plan. This report provides an overview of these issues and a discussion of how the Pension Protection Act (P.L. 109-280), as well as IRS guidance, affect them.
Pages: 6
Date: May 16, 2008