In the News February 5, 2008

David Godofsky Quoted in BNA Pension and Benefits Reporter

David Godofsky was quoted in the February 5 BNA Pension and Benefits Reporter article titled, “Cash Balance Plans: Treasury, IRS Provide Backloading Guidance For Cash Balance Pension Plan Conversions” discusses the February 1 Revenue Ruling 2008-7 that addresses the application of accrual rules for pension plans under tax code Section 411(b)(1), commonly referred to as the “backloading” rules,” with respect to the “greater of” issue.

David said that, "The bottom line is that this [Revenue Ruling 2008-7] is really, really good news," He said that the ruling is "incredibly helpful" and “It comes very close to solving problems regarding "greater of" benefit formulas when traditional defined benefit pension plans are converted to cash balance plans. David added that, “the way the revenue ruling analyzes backloading actually clarifies another issue that had been open for some time about how the backloading calculation is otherwise done…It correctly analyzes the issue of backloading when a variable interest rate is in a cash balance plan.” He also noted that the revenue ruling settles the law on the calculation of backloading itself.

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