A plan has an increasing benefit formula. At the beginning of the plan year, the AB equals $10 x YOS. At the end of the plan year, the AB equals $11 x YOS. The increase occurs in the middle of the year. This formula is from an amendment that has been effective for years, pre-PPA. The plan is a BOY valuation.

Assume a participant has 20 YOS at the BOY, AB = $200, and 21 YOS at the EOY, AB = $231. Does the entire increase go towards TNC? Does the increase get pro-rated, meaning PV $11 increase for TNC? I remember seeing something regarding if you have an amendment increasing benefits during the year that you would pro-rate the TNC. However, this plan does not have an amending during the year, it is just an increase in benefits from the plan formula.

How do you determine the funding for the plan year?

Back in 2004 the PFEA legislation was passed.

It included changes in connection with 415 lump sum payments.

It also required that DB plans be amended for PFEA by the end of the 2006 plan year.

I observe a one participant plan that of course did not make any pension payouts during 2004 and 2005.

This plan does not have a PFEA amendment.

Of course it will be amended for PPA, which includes the current 415 lump sum payout rules.

Does it seem necessary to add a PFEA amendment now?

Thanks for comments.

Particiant got a letter from the Social Secuity Administration saying he might have benefits from a plan we have administered since 2002. We have no record of him. The letter states he was reported in 1977. Of course he does not remember being paid anything. Client cannot find records back that far. Bank cannot find records - i.e. they have changed ownership etc.

Participant wants proof he was paid.

Any ideas how to deal with this?

Thanks

Pat

I have seen new plans created, either an EGTRRA 401k plan or a GUST DB plan, that include tack on amendments for PPA, 415 regs and in the case of DB plans good faith EGTRRA amendment.

When filing for an initial DL would you just file the Plan document with or without the tack on amendments?

Thanks.

I have a small plan for which I am doing the alternative reporting. There was a distribution in 2008.

The instructions say for the alternative reporting regarding Schedule R (p.9 of instructions): Identifying information and Part II. If I have nothing to report in Part II, do I still have to file it?

I have a plan that we report the Schedule I on a cash basis. At the end of 2008, there are three people with actual accounts.

The ER owes a 2007 top heavy contribution which is going to go to those three people plus another two people (and those two people are terminated). We have not reported the contribution on the Schedule I as a receivable (since we are filing on a cash basis).

For the participant count on Form 5500, do I put 3 account balances or 5 in 7(g)?

My question is in regard to the whipsaw litigation. I was curious as to what qualification/erisa issues are raised when a court orders a plan to recalculate benefits retroactively using the whipsaw calculation (i.e., a plan that was paying the hypothetical account balance for lump sum payments is ordered to do the whipsaw calculation for such payments retroactively). Under such order, would the plan be amended to comply with the order and, if so, does that raise any other issues. If not, do you have operational failures for the new calculations? Notice to participants?

We have a retireed employee for whom we are bound by employment contract to purchase health coverage. He has been on COBRA at company expense with coverage through the self-funded plan and coverage will run out in Oct. Thoughts on whether we can put him on the self-funded plan with employer/employee co-share of funding? There are four more employment contracts to be honored.

Kathy Dupree

The Widget Company Pension Plan's calendar year 2008 Schedule SB was signed by the sole practioner Enrolled Actuary Heezer Stump. The 2008 5500 was filed in Marhc 2009. Unfortunately, Irving is serving a lifetime sentence in solitary confinement in ADX in Colorado for speaking his peace at the 2009 EA meeting.

I am unable to reproduce his 2008 results contained in his actuarial report, coming up with a 15% higher FT and 10% higher TNC. There are no pre-retirement decrements.

What are the options for going forward.

(1) Apply for change in cost method?

(2) Do nothing -- There is no change in cost method since law prescribes cost method and interest/mortaltiy assumptions?

(3) Advise client must redo 2008? If so, does this mean I would need to match 2007 elements within 5%? I couldn't use 2000-40 since 2007 Schedule B has already been filed?

(4) Go about merry way and ask Blinky to prepare an attachment for me to affix to the 2009 Schedule SB?

(5) There is no answer -- the words of 2000-40 (takeover plans) refer to concepts that no longer apply under PPA?

(6) View this example as an omen that it is time to find a better way to make a living?

We have a client that has a 401k plan and a 403b plan. The 401k plan adp test failed and it was suggested that the refund amount be transferred to the 403b plan instead of returning it to the participant as a refund. We can't seem to find anything in the regs about whether this is a viable solution. Anyone have any thoughts about this?

I had a QDRO pre-approved by the Detectives Endowment Association Annuity Fund regarding my ex-husbands account with the fund. The fund told me that they required that the QDRO state a specific dollar amount instead of a fraction as of the asset cut off date.

I submitted the QDRO to the court with a specific dollar amount and the judge amended the QDRO to state that my share would be a fraction (50%) of the account as of the asset cut off date. This reflected what was stated in my divorce agreement, which did not specifiy a dollar amount.

What do I do if the fund refuses to accept the amended QDRO that was signed by the judge becasue it did not contain a dollar amount for the distribution?

Can they refuse to accept a judge's order?

Other than an amendment to the plan and trust, is there anything else that needs to happen before a plan can freeze a fund inside the plan. I believe they are just trying to eliminate a stock fund as an investment option under the plan. any thoughts?

We administer a PEO that has several co-employers that have gone out of business and terminted their plan. All of the employees have been paid out but they have left amounts in the forfeiture account. I have not come accross this as usually the co-employers that terminate set up a successor plan and we would just wire the forfeitures to that plan. Has anyone had this happen or have a cite or recommendation on how I should proceed? Any assistance would be awesome!

Due to a coding error on the part of a recordkeeper, all money types were permitted to be used for hardship withdrawals even though the plan documents called for hardships to come exclusively from pre-tax deferrals. At this point it is uncertain how many plans/participants may have been impacted by this error.

In many cases, the balances were sufficient to support the amounts distributed, so the correction is merely a coding change.

However, there were some instances when the amounts distributed exceeded the amount that was available for hardship distribution under the terms of the plan. Some of those are probably instances where the excess was withdrawn from the safe harbor matching source.

What options do we have to fix those errors?

I do not work with DB plans, although I have some knowledge of them (enough to pass the ASPPA DB test anyway). I just want to make sure I am reading this wording from Notice 2009-71 correctly:

A special rule applies in the case of an applicable defined benefit plan that meets certain interest credit requirements under § 411(b)(5)(B)(i). Such a plan is treated as meeting the minimum benefit requirement with respect to any plan year if, for the plan year, each participant receives a minimum pay credit to his or her hypothetical account. The minimum pay credit must be not less than the percentage of compensation applicable to the participant in accordance with the following table:

Participant’s Age as of Beginning of Plan Year

30 or less: 2%

Over 30 but less than 40: 4%

40 or over but less than 50: 6%

50 or over: 8%

This is talking about a cash balance plan, correct?

Thanks!

Laura

When the insurance carrier offers a mail-order pharmacy program, and the dispensing mail-order pharmacy is in another state, which state law applies -- the state where the mail order pharmacy is located (Texas) or the state where our insurance contract is written (Ohio)? Thanksl

I have an American client living in England that wants to do a direct rollover to a Traditional IRA from TIAA. She accumulated the funds while working as a teacher in the USA before she emigrated to the UK She is obviously no longer in service (since 1993) at that school. The funds are in the TIAA Traditional account. They have informed her that she CANNOT move her money to a new qualified account outside TIAA in one lump sum. They have told her that she can only move the money into one of their plans in 10 payments over 9 years (Transfer Payout Annuity). Anyone else have experience of this type of restriction? It seems counterintuitive to me. It is after all her money. Would appreciate any advice anyone can offer.

We have a current COBRA participant whose initial 18 months of coverage is up at the end of September 2009. She believes she's allowed 36 months of COBRA for: 1) disabled domestic partner (we have nothing on file from the SSA confirming this) and 2) sites a new law enacted in NYS on 7/1/09 stating that everyone is entitled to 36 months of COBRA coverage, no matter what (she gave us this website: http://www.ins.state.ny.us/cobra/cobra_prem.htm)

Does anyone have any further information about this new law?

The client needs to reduce its work force due to economic factors and has decided to offer certain employees the opportunity to retire early with certain incentives, all of which are incorporated in a written agreement. The program is completely voluntary, in accordance with federal guidelines.

Does this arrangement need to be expressed in a formal written "plan document," or is the written agreement suffcient? Because this is voluntary and a one-time event, I don't believe additional writings are necessary, but would like other opinions.

Thanks much.

The following question was posed to our firm, but we do not work with COBA plans very often.

I have a question for you about providing health insurance for my employees. We have been following the letter/intent of the law in providing health insurance for those employees who wish to be on our companies plan. Within the last few years I have hired an employee whom has maintained her COBRA plan but is considering joining our health plan. According to the employee, she is eligible to stay with her COBRA plan. She is also a likely candidate for knee replacement surgery in the near future. This, of course, would cause a significant increase in our premiums.

Is it possible for our firm to pay her COBRA health insurance premiums and keep her off our group plan? She is eager to do this as she does not want to provide a burden to our group plan. If we can do this, what is the best legal way to accomplish it?

Any input would be great on this topic as we normally do not deal with COBRA issues. Can an ER pay COBRA premiums on behalf of an employee? If an employee is eligible for an ER's group plan are they then ineligible for COBRA?

Thank you,

Nathan