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Discriminatory Defined Benefit Plans: Finding Retirement Gold in the Least Likely of Places  

Author:  Gerald R. Nowotny.

Source: Volume 31, Number 04, Summer 2014 , pp.47-62(16)

Journal of Taxation of Investments

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In a world in which planning for retirement is increasingly important, but also increasingly difficult, the utilization of the exemption for employees covered by a collective bargaining agreement in Internal Revenue Code Section 410(b)(3)(A) provides a “win-win” situation for the employees and employer. The employees have the guarantee of a minimum pension plan as a result of the collective bargaining agreement while allowing the business owner to establish a pension plan with more substantial benefits—a defined benefit plan.

Keywords: defined benefit plan; discriminatory pension benefits; small business pension plans; IRC Sec. 410(b)(3)(a)

Affiliations:  1: Osborne & Osborne, PA.

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