Abstract

http://ssrn.com/abstract=290786
 


 



Nor Rhyme Nor Reason: Simplifying Defined Contribution Plans


David A. Pratt


Albany Law School


Buffalo Law Review, Vol. 49, P. 741, 2001

Abstract:     
Prior to the enaction of ERISA, tax-qualified retirement plans were classified as pension plans, profit-sharing plans, or stock bonus plans. Different rules applied to pension plans, largely because pension plans were viewed as true retirement plans whereas profit-sharing and stock bonus plans were regarded primarily as a way for the employer to share its profits with employees. Under ERISA, the focus has changed and the most important distinction is now between defined benefit plans and defined contribution plans. Despite this change, the pre-ERISA distinctions are still in effect. In addition, legislation enacted and regulations issued since ERISA have created new distinctions, and new types of defined contribution plans. This article illustrates the complexity of the rules governing defined contribution plans. The author argues that these differences are a trap for the unwary, and the different rules should be harmonized where ever possible to ensure that all qualified defined contribution plans are subject to the same rules. Simplification of rules, and elimination of unnecessary differences, is important, first, to ease the severe compliance burden for current plan sponsors and, second, to make retirement plans more attractive to those employers that do not currently sponsor a plan.

Accepted Paper Series


Not Available For Download

Date posted: November 13, 2001  

Suggested Citation

Pratt, David A., Nor Rhyme Nor Reason: Simplifying Defined Contribution Plans. Buffalo Law Review, Vol. 49, P. 741, 2001. Available at SSRN: http://ssrn.com/abstract=290786

Contact Information

David A. Pratt (Contact Author)
Albany Law School ( email )
80 New Scotland Avenue
Albany, NY 12208
United States
518-472-5870 (Phone)

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