Department of Risk, Insurance, and Healthcare Management
489 Ritter Annex, Voice: 215-204-8144, jfax: 209-370-9309
email: 325@vanderhei.com, last updated: 12/04/00
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Jack L. VanDerhei, Ph.D., CEBS Department of Risk, Insurance, and Healthcare Management 489 Ritter Annex, Voice: 215-204-8144, jfax: 209-370-9309 email: 325@vanderhei.com, last updated: 12/04/00 Back to 325 Home Page |
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Objectives: The instructor will review the relevant legislative modifications to this system beginning with ERISA in 1974. The three discussion questions at the end of chapter one were written to allow the students to analyze this system in a fashion that may be more familiar via techniques already mastered in economics, finance or accounting courses. |
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Objectives: Students should understand the basic principles upon which the OASDHI program was established and its current structure. Specifically with respect to the retirement aspects of the program, the students must understand the financing of the program (including the maximum taxable wage base), individuals eligible for benefits, spousal benefits, calculation of both the AIME and the pia, cola adjustments, earnings test, delayed retirement credits and federal taxation of Social Security benefits. |
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Objectives: Students need to the objectives sponsors attempt to satisfy through the introduction and maintenance of a qualified retirement plan. |
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Objectives: The instructor will provide the class with an overview of market trends from his presentation at a recent international conference on the evolution of the defined contribution market |
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Objectives: Nondiscrimination requirements will be analyzed beginning with the definition of a highly compensated employee, minimum coverage requirements and section 401(a)(4) provisions. The process of integrating a retirement plan with Social Security will be illustrated with several case studies. |
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Objectives: Students must understand the essential rationale of vesting requirements and how they are implemented in addition to the minimum benefits accrual rules. Section 415 limits for db and dc plans will be reviewed but §415(e) will be ignored due to the phase-out in y2k. Top-heavy plans will be examined as well as the alleged need for modification to these requirements if retirement coverage among small plans is to be increased. |
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Objectives: Students must understand the fiduciary exposures presented by participant directed plans as well as the potential benefits of Section 404(c) compliance. The relevance of current litigation involving 404(c) -- especially the Unisys case -- will be stressed. |
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Students must understand the distinctions between Defined Contribution Pension Plans (Money Purchase) and Profit Sharing Plans. Typical plan provisions will be presented and plan loan provisions in the tax code will be stressed. Students also need to be familiar with the maximum deductible contribution requirements for profit sharing plans. |
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Chapter nine on thrift plans should be skimmed for historical background only. Chapter eleven on 401(k) plans is probably the most important topic for the semester. Students must master the nondiscrimination rules as they relate to this plan feature. Lectures will mix legislative/regulatory constraints with several case studies covering ADP/ACP, QNECs, QMACs, recharacterization, etc. |
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TBA: My guess is that proposed cash balance legislation this semester could have a fundamental impact on this topic. |
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Students should skim Chapters 14-15 of the text book for background but download, print and bring to class my chapter: Funding public and private pensions. I have developed several spreadsheets to illustrate the concepts involved in funding defined benefit plans that we will work through in class. Students must know: actuarial cost methods, minimum required contributions, and maximum deductible contributions. |
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Students should understand the benefits and costs available to defined benefits sponsors and participants of this mandatory government insurance program. |
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Students must understand how IRAs can effectively be used to circumvent premature distribution penalties when employees change jobs. We will also discuss the 20 percent withholding requirements imposed by the government. Students also need to be familiar with the latest government attempt to stimulate plan sponsorship among small employers (SIMPLE plans): what they are, how they work and their relative advantages and limitations with respect to existing plans (primarily 401(k) plans). |
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Students need to understand how these plans, specifically cash balance plans, differ from traditional defined benefit plans and defined contribution plans. My Senate testimony describes why these plans appeal to employers and the state of the art at the time determination letters were suspended (September 1999). Once the outcome of the November election is resolved, I will provide an update with respect to likely future government constraints. |
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Students must understand the variations between what is "best" for employees and what they actually select in participant directed plans. Lectures will focus on results from a database of over 10 million individual 401(k) participants that I have been collecting since 1996. |
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Students must understand the general taxation provisions for both periodic and non periodic distributions. The concept of net unrealized appreciation and its impact on the inclusion of employer stock in profit sharing plans will also be discussed. |
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Students should be familiar with the impact of FAS 87 and 88 on the sponsor's income statement and balance sheet. The text describes the mechanics of the process while some of the supplemental readings illustrate how the pension "expense" has turned negative for many companies and is now being criticized by many analysts. |