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Fall 2003
Marc Scudillo CPA, CFP, MBA, MS
Managing Partner, Amper Financial Services Group
In an era when business needs can change overnight,
employers have to anticipate the needs of their
employees and adapt accordingly. This is especially
true for assisting owners and key employees in
maximizing retirement saving opportunities.
The regulatory environment under which
corporate employee benefit plans operate is a complex and
dynamic one. Federal requirements under the Internal Revenue
Code and the Employee Retirement Income Security Act have
undergone numerous changes that have had direct and indirect
implications for employer-sponsored retirement and health plans, as
well as other benefit programs. In addition, corporate plan sponsors
face the challenges of complying with other regulatory authorities,
including the Equal Employment Opportunity Commission, the
Securities and Exchange Commission, and the Department of
Health and Human Services. Moreover, nongovernmental
authorities — such as the National Association of Insurance
Commissioners and the Financial Accounting Standards Board have
developed standards and procedures with which employee benefit
plans must grapple on an ongoing basis. The range of issues raised
by these authorities and the courts is immense.
The continued growth of defined contribution plans reflects changes
to traditional career-oriented employment patterns, concern for the
future of Social Security, longer life expectancies, and individuals' desire to
exercise control over their own retirement savings. Technological advances and a
shift toward increased employee responsibility for retirement-related investment
decisions are continually changing the way defined contribution services are
delivered. Profit-sharing, 401(k), and other individual account plans are an
increasingly important component of employee retirement savings.
But employers frequently seek to enhance their retirement programs to better
optimize and balance the often diverging objectives of value, cost, and perception.
In recent years, revolutionary approaches that merge defined benefit and defined
contribution concepts have led to the development of the cash balance plan and
other hybrid plans.
The cash balance plan design expresses the retirement benefit in terms of the
value of an accumulated lump-sum amount, typically providing a portable, more
understandable benefit. The presentation and delivery of retirement income has the
feel of a defined contribution plan, while the flexible design and funding
alternatives of a defined benefit plan are retained. Some of these plans have
allowed for increased benefits to owners and key employees of $60,000 to
$200,000 or more while keeping costs at a negligible amount for the company.
Amper has been involved with the full spectrum of defined contribution and
defined benefit plans. Creative and proactive professionals can help employers find
innovative solutions to benefit plan design, funding, accounting, compliance,
communication and investment issues.
Securities offered through Securities America, Inc. (Member NASD/SIPC)
Advisory services offered through Securities America Advisors, Inc.
2015 Lincoln Highway, Edison, NJ 08818; 732-287-1000 (ext. 312)
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