Frequently Asked Questions -
Q: What is a DB/K Plan and what is
414(x)
A: Section 414(x) was added by section 903(a)
of the Pension Protection Act of 2006, Public Law 109-280, 120 Stat.
780 (PPA ’06), effective for plan years beginning after December 31,
2009, and amended by section 109(c) of the Worker, Retiree, and
Employer Recovery Act of 2008, Public Law 110-458, 122 Stat. 5092 (WRERA).
An eligible combined plan provides a vehicle through which an
employer can maintain both a defined contribution plan and a defined
benefit plan on a combined basis, thus reducing the administrative
burdens and costs of maintaining separate plans
Q: So, do I understand correctly that a
414(x) plan is partially a defined benefit pension plan?
A: That is correct. In fact, one might say that a 414(x) plan
is "primarily" a defined benefit plan, with a 401(k) feature.