TAX 9873 Lecture Notes - Lecture 52: Pension Protection Act Of 2006, Aon Hewitt, Deferral
Document Summary
Under cash or deferred arrangement (coda), employees can make cash or deferred election to their account under a qualified plan. The cash or deferred election can be money from their wages. Rural cooperative plans (i. e. rural agricultural, electric, and telephone cooperatives) Rarely see a money purchase: obligation to fund every year. 401(k) is a feature of the former two. Automatic enrollment of workers in the retirement plan at a default savings contribution rate. This includes "qualified diversified investment alternatives that automatically invest a worker"s 401(k) contributions in an age-appropriate "life-cycle" diversified fund (greater equity exposure for younger participants, more fixed income for older participants) Automatic contributions on a periodic basis (monthly, quarterly, etc. ) Exemption on prohibited transaction regarding investment advice given to participants. Recognition that pension plans have gone away from many americans. Middle class tend to not be savers, just to cover living expenses.
