Even as pensions fade away for most workers, some of the country’s highest-paid professionals have found a way to significantly boost the money they put into their pensions, some socking away as much as $100,000 a year. Federal pension laws, established to keep plans fair to all participants, forbid the most highly paid workers in a pension plan to use the plan to their advantage. But legal, medical, accounting and consulting firms have found a way to use those existing laws to create sizable pensions for themselves.

They’re able to do that because pension regulations define “fair” very broadly — including one test that compares not the amount of contributions but the effective benefits, said James Van Iwaarden, a Minneapolis pension and benefits consultant. The math is complicated and depends on the ages and incomes of everyone involved.

Van Iwaarden offers this example: Say a medical clinic puts $100,000 into the 401(k) account of a doctor and $3,100 in the account of a nurse. The doctor is 65; the nurse, 25. The doctor will retire within the year; the nurse in 40 years. At gold-watch time for both of them, those contributions will amount to an annual benefit worth 5 percent of their incomes.

That passes the fairness test. Not everybody thinks it should.

“They are really good things for the highly compensated,” said John Hotz, deputy director of the Pension Rights Center in Washington, D.C. “I think the interests of low- and moderate-wage earners have been all but forgotten.”

Van Iwaarden disagrees. These business owners are only paying into their pensions money that otherwise they’d pay themselves as income or profits, he said. “They’re not getting anything that they didn’t before,” he said. “They’re just taking the money in retirement benefits. It’s still coming out of their own pockets.” And in the process, their employees get a pension, too.

Sometimes, however, the laws can work to the disadvantage of employers.

Ten years ago, Rick Anderson set up a 401(k) plan at his engineering contracting firm, Cable System Services in Eagan. But his employees aren’t saving very much, even though he offers a 25-cent match for every dollar they put in their account. Federal regulations don’t allow him to save much more than they do, so Anderson has been limited by how much the plan lets him put away for himself. “Here I am, 56 years old, and I’ve got only another 10 or 15 years to put anything away,” he said. “I’ve got friends my age who are already retired.”

Anderson may be able to get some relief.

New “safe harbor” rules for 401(k) plans disentangle employer and employee savings to some extent, said Jeff Cairns, benefits specialist at the Leonard, Street and Deinard law firm in Minneapolis. The regulators reason that an employer who offers his workforce the opportunity to save shouldn’t be penalized if they don’t take him up on it. It turns out that Anderson could more than double his current annual limit with the current “safe harbor” cap of $14,000. “I’m looking into that now,” he said.

H.J. Cummins is at

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