Partnerships are increasingly turning to market rate cash balance plans for their partner retirement plan. Mercer's 2014 Law Firm Retirement Benefit Survey results show that 41% of respondents who sponsor a defined benefit plan for partners have adopted market rate cash balance plans – 10% more than the previous year.
SHOULD YOU CONSIDER A MARKET RATE DESIGN?
If your retirement plan isn't there yet, here are the top three reasons why you should consider this design. Market rate cash balance plan:
With these advantages and the recent clarification by IRS on rules and regulations governing it, we expect the growing popularity of market-rate of return cash balance plan to continue in the coming years.
Mercer can help you assess and address the financial risks of your unfunded plan. We utilize our proprietary model under various economic conditions to provide an understanding of both current and potential cost levels. The selection of reasonable economic and firm growth assumptions is critical to this modeling and is based on the firm’s data, the firm’s business expectations, and our industry expertise. Once the potential level of costs of the plan are understood, design alternatives meeting firm objectives can be identified. The impact on both firm costs and on individual partners can then be assessed, allowing the firm to select an appropriate path forward.
Partnership Retirement Services