A Congressional proposal has been introduced that would “severely reduce the attractiveness of cross-tested plans” according to the American Society of Pension Professionals & Actuaries.
Cross-tested plans can be used to provide different defined contribution allocations to different groups of employees. Often cash balance plans are aggregated with a defined contribution plan and cross-tested for nondiscrimination. Changes to the cross-testing rules could threaten these arrangements, requiring plans to be redesigned or terminated.
Anyone who’d like to to share their opinion of this proposal with their Congress member can email them using a tool ASPPA has provided, or you can find contract information at www.house.gov.