The IRS will soon issue regulations on the interest rate employers can use to provide credit to the account balances of cash balance pension plan participants.
The issue involves a provision in a 2006 pension funding law mandating that the interest credited to participants' account balances not exceed a market rate of interest.
The IRS, though, has yet to issue final regulations defining what is a market rate of interest.
In Announcement 2009-82, the IRS said it expects to issue regulations “in the near future” and that it will give affected employers until 2011 to comply with the new requirements.
Jerry Geisel is editor-at-large at Business Insurance, a sister publication of Pensions & Investments.
