Employee Benefits Advisory: The Future of Cash Balance Retirement Plans after Cooper v. IBM and the Pension Protection Act of 2006
8/17/2006
The fate of "cash balance" plans has been much debated over the last few years, and many of the more contentious issues surrounding their maintenance and operation have been settled prospectively under the recently enacted Pension Protection Act of 2006. For existing cash balance plans, however, some key legal obstacles remained due in part to the holding in a single U.S. district court case, Cooper v. IBM Personal Pension Plan. The appeal in that case has now been decided in a way that is favorable to cash balance plans and their sponsors. This advisory describes the likely impact of the Act and this new appellate decision on the future of cash balance plans.
