A Reviewer's Reference, originally published in 1994, offers similar guidance on this issue. Subsequently, in September 1995, OGE published a proposed regulation that contained an interpretation of section 208 as well as a number of exemptions from the application of section 208. See 60 Fed. The preamble to that regulation, which was reviewed and approved by the Office of Legal Counsel at the Department of Justice, includes a discussion on page 47214 of the applicability of section 208 to employee pension interests. The purpose of this DAEOgram is to summarize that discussion in order to update and refine our previous guidance on this issue, and to address questions that have arisen about the continuing validity of our original advice in 83 OGE 1.
Most pension plans fall within one of two categories.
A defined benefit plan is a type of retirement plan under which an employer makes payments to an investment pool which it holds and invests for all participating employees. Defined benefit plans are the obligation of the employer. Under this type of plan, participants receive a defined or specified benefit upon retirement, such as an annual income that is a specific percentage of the compensation received by the participant during a certain period of his employment. A defined contribution plan is a retirement plan that establishes an individual account for each participant. Under this type of plan, each participant will receive a retirement benefit that is based upon contributions to, and income generated by, the account.