What is the definition of hybrid benefit plans under the PPA?
Prior to the PPA, no specific definition of hybrid benefit plan existed. Within the rules related to hybrid plans, the PPA defines applicable defined benefit plan. An applicable defined benefit plan (or, for purposes of this book, a hybrid defined benefit plan or, simply, a hybrid plan) is any plan that defines the accrued benefit, or a portion of the accrued benefit, in the form of a hypothetical account balance (such as a cash balance plan) or as an accumulated percentage of a participant’s final average compensation (as in a pension equity plan). As part of the PPA, the Secretary of the Treasury is directed to issue regulations to define an applicable defined benefit plan to include any defined benefit plan that has a similar effect to an applicable defined benefit plan as statutorily defined. The Internal Revenue Service uses the term statutory hybrid plan to refer to an applicable defined benefit plan and any plan that has an effect similar to an applicable defined benefit plan. [
