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TREASURY WITHDRAWS CASH BALANCE PLAN REGULATIONS

June 15, 2004

The Treasury today announced that it is withdrawing Proposed Regulations on cash balance plans. The Treasury press release says:

   The regulations are being withdrawn to 
   provide Congress an opportunity to review 
   and consider a legislative proposal on cash
   balance plans that was included in the 
   Administration's Budget for Fiscal Year 2005.
   The legislative proposal would require a five-
   year "hold harmless" period for current 
   employees following a cash balance 
   conversion, would ban benefit "wear-away" 
   after a cash balance conversion, and would 
   clarify the legal status of cash balance plans 
   and other hybrid plans.

The BenefitsBlog covers a new District Court case upholding a conversion of a defined benefit plan to a cash balance arrangement; she also has some background on the controversy surrounding cash balance plans.

UPDATE: More here.

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