CAI NEWSBRIEFS

HAVE A RETIREMENT PLAN QUESTION? ASK CAI!

            Our website www.askcai.com is now on line. In addition to containing information about CAI, the website provides a wealth of information on all types of qualified retirement plans. Special features outline the basic types of programs which are available and may give you some new ideas about how your retirement program can be changed to best achieve your objectives. Visit us on-line and let us know what you think.

NEW COMPARABILITY REGULATIONS IN PROCESS OF BEING ISSUED

            As this newsletter is being printed, the Treasury Department is issued changes to the regulations on New Comparability plans. Several conferences have been held over the past few months between the pension and business community on one side and the Treasury Department on the other. It is our understanding that Treasury has taken the concerns of the pension professionals and in particular, the American Society of Pension Actuaries, into account in developing these regulations. The bottom line is that some age weighted plans will likely not be affected by these regulations while others will face a choice between giving more money to certain employees, or terminating. A summary of the regulations will appear on our website as soon as we have had a chance to review them.

COMPREHENSIVE RETIREMENT INCOME SECURITY AND PENSION REFORM ACT OF 2000 (CRISP) MOVES THROUGH CONGRESS

            After 2 decades of reductions to pension contributions, a new bill, known in the House of Representatives as CRISP would increase the amount which can be contributed by all individual’s to their retirement program. Included in the bill are phased-in increases in the 401(k) contribution to $15,000, an increase from $30,000 to $40,000 in the defined contribution limit an equivalent increase in the defined benefit limit. The compensation limit, currently capped at $170,000 would be increased to $200,000 and the combined plan limit of 25% of pay would be repealed. Finally, to encourage small businesses to establish new retirement plans, a tax credit would be given if certain conditions are met. Whether or not this bill will actually become law is tied into the current political maneuverings in Washington as both parties seek an advantage prior to the election. If it is passed, it will provide a major boost to private pensions and, in particular, to small businesses looking to provide benefits for their employees. We will keep you informed on the progress of this bill in future Newsletters and, of course, on our new website.