AICPA testifies at hearings on pension benefit protection.
Coustan told the Journal "There are parts of the bill that w applaud, but we are opposed to others." In particular, the AICPA opposes the elimination of cross-testing, in which a complex set of rules to test for discrimination in defined-benefit plans also are used for defined-contribution plans. "Cross-testing treats all employees equally," Coustan said, "from the beginning to the end of employment."
The AICPA also opposes a 150% full-funding limitation that disallows deductions for employer contributions over and above 150% of current liabilities. In his testimony, Coustan pointed out that the term full funding as used in the bill did not mean a plan had enough funds on hand to pay all benefits when they come due. Rather, he said, full funding was based on an artificial assumption that a plan terminates today, with a 150% cap on today's liabilities.
In addition, Coustan said, the AICPA opposes the 50% reversion penalty. Under certain circumstances, an employer withdrawing funds from an overfunded pension plan must pay a 50% penalty tax on the reverted funds, even if they are used to enhance the security of other employee benefit programs.
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|Publication:||Journal of Accountancy|
|Article Type:||Brief Article|
|Date:||Jul 1, 1994|
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