Compliance September 27, 2005

Bill Proposes The Principal and ASPPA DB(k) Plan Concept

September 27, 2005 (PLANSPONSOR.com) - Representatives Rob Andrews (D-NJ) and Jim Nussle, (R-IA) are co-sponsoring a bill called the Small Employer Defined Benefit Expansion Act, that combines the guaranteed benefits of a defined benefit plan and 401(k) employee savings in a single plan.
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In a news release, The Principal Group and the American Society of Pension Professionals & Actuaries (ASPPA), noted that the DB(k) concept they have developed is similar to a proposal in the recentNational Equity Savings Trust and Guarantee (NESTEG) Actapproved by the Senate Finance Committee in July (See  Pension Bill Gets by US Senate Finance Panel ).  

The bill also allows for employers to provide automatic enrollment and automatic salary deferral increases for the 401(k) portion of the DB(k), according to the announcement.“With growing concern over potential shortfalls in 401(k) plan savings and a decline in sponsorship of defined benefit plans, the DB(k) concept offers a unique solution to helping workers achieve retirement security by combining the best elements of these two retirement plans,” said BrianGraff, Executive Director/CEO of ASPPA, in the announcement.

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A fact sheet detailing the features and benefits of the DB(k) can be viewed  here .  

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