Jump to content
Sign in to follow this  
VeryOldMan

Who is a participant for F5500 C/R

Recommended Posts

This question goes to the definition of "active participant" in the f5500 instructions for a pension plan. My client received a $2 mill age 70 415 lump sum in 2012 under the C-limit, but he continues to work and is still accruing service and comp credits, BUT it is unlikely that he will ever be able to accrue additional benefits. His comp is $350k per year. I ran a MASD analysis and he is still about 10% away from ability to accrue. My question is: should he be listed as a participant on the Form 5500CR. On the SB he would not be listed as a participant since he has no current benefits.

Share this post


Link to post
Share on other sites

I would say he's still a participant with a right to accrue future benefits. Though his current benefit is $0 due to the offset from the prior payout.

Share this post


Link to post
Share on other sites
1 hour ago, VeryOldMan said:

 On the SB he would not be listed as a participant since he has no current benefits.

Really?

Share this post


Link to post
Share on other sites

 instructions say to include those who are currently accruing or who will accrue benefits in the future. Since he might not accrue benefits in the future, I wasn't sure to list as a participant on the SB. A an afterthought and your remark, unless I could prove he would never accrue, I think I should include him.

Share this post


Link to post
Share on other sites

Who says you can't teach a (very) old dog!  Happy New Year! As an afterthought of my own keep in mind that an actuary, as part of the funding method, can choose to include all or a portion of those who are not yet participants in the valuation.  If that happens  then the actuary essentially treats those who have not yet entered the plan as active under the terms of the plan.  Finally, if the formula would establish an accrued benefit as of the beginning of the year for such a "participant" the item 3 body count and the Funding Target could be higher than expected.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

×
×
  • Create New...