Should a salary reduction plan be funded through a mutual fund or a variable annuity?
Article Abstract:
An evaluation of salary reduction funding schemes reveals that a mutual fund outperforms variable annuity for all five investment objectives. The study also finds that differences were significant at the 0.05 level for four out of five categories, with the mutual fund high-yield bond market still showing a 5.22% margin against variable annuity. The study finds that employers may enjoy superior financing packages from mutual funds than from a variable annuity subaccount.
Publication Name: Journal of Compensation and Benefits
Subject: Insurance
ISSN: 0893-780X
Year: 1998
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Internal revenue service guidance on 401(k) safe harbors finally comes to port
Article Abstract:
Nondiscrimination testing is no longer required for 401(k) plan employer contributions and employee deferrals effective for the plan year commencing on or after Jan 1, 1999. This is one of the amendments made in the Internal Revenue Code of 1986 as a result of the Small Business Job Protection Act of 1996. Moreover, an employer's equivalent contribution for a highly compensated employee cannot go beyond the rate for that of a non-highly compensated employee.
Publication Name: Journal of Compensation and Benefits
Subject: Insurance
ISSN: 0893-780X
Year: 1999
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