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Comp & Benefits

Effect of pension reform unclear

               

The effect of last year’s pension reform law on large companies’ sponsorship of defined benefit plans remains unclear, say the experts at Watson Wyatt and a new analysis of FORTUNE 100 companies.

     Fifty-eight companies in the FORTUNE 100 sponsor defined benefit plans, down from 90 in 1985. But the pace of change slowed somewhat last year, and the number of companies offering so-called hybrid pensions held almost constant, after declines earlier in the decade. Hybrid plans offer the security of traditional pensions, along with 401(k)-style features, such as account balances, that appeal to workers. The new rules under the Pension Protection Act of 2006 affirmed the legality of these plans.

     Of the 58 defined benefit plans among the FORTUNE 100, 31 were traditional defined benefit plans and 27 were hybrids, which include cash balance plans.

     This year could be a turning point, says Watson Wyatt. Companies are trying to understand the new landscape. But in the long run, the new rules will provide a more supportive environment that may encourage companies to keep their traditional plans or adopt hybrid plans.

IRS guidance on rollovers to HSAs

The Internal Revenue Service has issued guidance regarding how employers can roll over funds from their health Flexible Spending Arrangements (health FSAs) and Health Reimbursement Arrangements (HRAs) to Health Savings Accounts (HSAs) for their employees. 

     The Tax Relief and Health Care Act of 2006, Pub. L. No. 109-432, enacted Dec. 20, 2006, allows employers to amend their health FSAs or HRAs, with balances on Sept. 21, 2006, for a one-time rollover to an HSA by 2012. The guidance clarifies the requirements for making these rollovers, which must be made directly to the custodian or trustee of the HSA. 

     Under the guidance, a health FSA or HRA must be amended and a rollover selected by an employee before year-end. The balance amount must be transferred to the HSA by March 15 of the following year. 

The IRS says it expects to issue additional guidance on this topic in the future.

CT salaries 1997 – to present

Over the past decade CBIA has frequently surveyed its members about the salaries, they pay their employees. This data is published in our annual Compensation Report, and presented according to job family. Click here to see the data for job families.

 

 

 

 

 

 

 

 

 

 

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