Effen

1. I would say yes, but you could have other settlements that will give you more than 2 pieces. 2. I would say yes - each subsequent lump sum will trigger a re-measurement which may change the discount rate. I think the answer to both questions is yes, which is why most people only do the settlement accounting once, at the end of the year. Doing a re-measurement after each lump may be technically correct, but an administrative pain.

Was this a separate interest or a shared interest QDRO? Your description seems to imply shared interest, and if so, I would lean towards the AP being SOL. However, if it was a separate interest, could you argue the benefit was converted to an annuity on the APs life and therefore the death of the participant would have no impact since 100% of the AB is now completely assigned to the AP? Just something to think about.

Forgive my possibly stupid question, but what advantage do you gain by investing a tax deferred trust in off shore accounts? Why are you considering this?

Are you surprised by the attention, or lack of attention? I am still using PPA Funding Target for 90% of my single employer plans and I still have never had an auditor ask me one question.

Coming back to an older question - if my plan allows for annual annuity payments, am I ok using annual annuity factors to determine the 415 limit? If my plan does not permit annual payments, do I have to use monthly factors? I think the answer to both is "yes", but I am hoping for confirmation.

Lots of information out there on this board. Just do a few searches and you should find plenty of advice. Here is just one that you might find helpful. http://benefitslink.com/boards/index.php?/topic/43751-defined-benefit-and-sep-ira/

I agree. All I want to see is the QDRO. If they send me additional information I make sure my transmittal letter explicitly states that I did not review any of it.

4) leave it alone and "fix" it next year. Why is this anything other than an assumption change? I don't really understand what you mean by you "hadn't accounted for 417(e) PVAB"? Under the PPA Regs the only thing you do in your funding target is use 417(e) mortality if the plan pays 417(e) lump sums, and that generally is not significantly different than the standard tables. I see plans all the time that we take over where the prior actuary was not recognizing the lump sum in the FT. I just "fix" it and move on. I don't think it rises to a level that I would tell the prior actuary that they had to restate a previous valuation. If you chose to redo the 2013 valuation, why not redo the 2012 also, or 2011, or 2010? I assume you weren't recognizing this in any past year, so why just fix 2013?

sorry, but I am even more confused: "The were separate interest. The 401K was split" - What was separate interest? The pension, or the 401(k), or both? "With both of us having having survivorships on each other pensions. If I pass before I commence she would recieve a porsion of my pension as would my sons. The same would go to me if she passes." This sort of makes sense, except the "as would my sons" part. If your ex is to be the beneficiary of your J&50% S annuity, I don't know how any would end up with your sons since you cannot have a contingent beneficiary. "So instead of taking a lump sum ( which are plan offers) I have to take a 50% annuity. The same goes for her." OK, this fits with your previous statement. "called fidelity, they told me she already recieved her portion of my pension, which I can see with my new numbers." Did she receive her portion of your pension (DB) or your 401(k)? If she really did receive her portion of your pension, I would agree that forcing you into a J&50 with her as beneficiary seems redundant. There may not be anything you can do about it, but I would agree with your frustration. Does she also receive a portion of your pension as a monthly annuity, or does she only receive a monthly benefit after your death?

So you chose to let your ex-wife's attorney draft your QDRO, you chose not to have your attorney review it, and then you reviewed it and chose to sign it, and you think someone else caused your "problem"? If you work at the same place, did you also seek a QDRO to attach her 401(k) and pension benefits? Anyway, back to trying to help...you keep saying your "she already received a portion of your benefits", but then you way, "we will not be able to get a lump sum". This has me confused. Is the "portion of your benefits" she received from the 401(k) or the pension plan? It would be common for her to receive her portion of your 401(k) balance immediately, but it would be rare for her to receive your portion of your pension benefit until you chose to retire (or she chose to commence her payments). Also, I don't understand how any of that would impact your ability to receive a lump sum. Do you know if your pension QDRO was a "separate interest" or a "shared interest" QDRO? Generally today most QDROs are "separate interest" which means the benefits are split into two pieces and each person makes their own benefit election on their piece that is independent from the other. A "shared interest" QDRO would be one in which the AP simply receives a portion of the participant's benefit, but the payments are contingent upon the participant's lifetime.

Although it may feel like you are being taken advantage of, what you said doesn't sound outrageous, although you seem to be talking about 2 different plans - a 401(k) and a pension plan. You said the 401(k) was split 50/50 and that has been distributed and a off the table. I assume you are talking about a pension plan when you refer to lump sums and QPSA benefits. Since she was entitled to the death benefit while you were married and she can retain that right after the divorce through the QDRO. In addition, she is entitled to 50% of your benefit earned during the marriage. You may not agree with the law, but that doesn't change it. QDROs are very complex and can split the pension in an infinite number of ways. Since you agreed to it and signed it there is probably nothing you can do now. Most judges don't accept "I didn't know what I signed" as a valid reason to re-open the QDRO. Besides, the terms you described sound fairly reasonable.

You are asking the right questions, but the answer is in the plan document. What is the death benefit under the plan? Is it payable to non spousal beneficiary? Did the plan require the participant to make an election of their form of payment at the MRD or did the plan just pay the accrued benefit with no election. My personal opinion is that no election is necessary for the payment of RMDs, however many argue that it is. Either way, your plan document should define the benefit and when it is paid. You might need to get the actuary involved to determine the value of the death benefit, if any.

I would not assume there is a 100% probability the IRS adopts this table, and certainly not before 2017. Comment letters are due in a few weeks and I know several organizations are raising some concerns about the data quality used to produce it. Also, many will lobby the IRS not to use a 2D table, especially for small plans. It will be interesting to see what kinds of comments they receive. I would not assume the IRS will just use it without other considerations.

Seems ok to me, assuming they are all family member and HCEs. Generally the allocation of excess assets is considered to be a plan amendment that must satisfy the non discrimination rules. However, if they are all HCE's, then you don't need to worry about it. As long as the contribution is deductible, and the distributions are less than the 415 limit, I think you are ok.

You did "earn it", you earned it as a benefit payable as an annuity. You did not earn it as a lump sum because the plan does not offer that benefit. Yes, the Funding Target should include the assumption that a benefit is payable as a lump sum, however, it is generally not a problem for valuation software to assume a certain percentage elect a lump sum without the value of the subsidy, and a different percentage will elect an annuity, which would include the subsidy. Sure the plan can pay the lump sum value of the subsidy, but that extra payment comes at a price of a lower overall benefit, or a higher employer contribution. The reality is the plan benefits are set by how much the employer/employee wants to contribute. If the plan pays out higher lump sums, it just means someone else gets less somewhere else.

2 Cents - I generally disagree with your position, I don't see any problem in plan's not including the value of the early retirement subsidies in the lump sum values. If I am providing you with an incentive to retire, why should I be forced to pay you that value up front in one lump sum. Maybe the value of the incentive is not worth as much as you thought, because you can't get it in a lump sum, but that should be part of the analysis, not forced upon the employer to pay. If you want the subsidy, take the annuity, if you don't, take the lump sum. Why is that "wrong"? I think the relative value requirements do a nice job explaining the value of the options so participants can make informed decisions. However, I also think the rules are often misinterpreted by practitioners, or simply ignored, which is a problem with our profession and not the regulation. If practitioners provide proper disclosures, participants can make informed decisions.

Actually, it is fairly common in the real retirement world for plans to have a one year wait, but to credit accruals from date of hire. Nothing wrong with it, in fact I would expect it is more common than accruing benefits based on participation. Certainly outside of the small plan world, it is more common. You are not a participant until you satisfy eligibility. Once you are a participant, you are instantly entitled to a benefit, if you are vested.

Keep in mind that whatever you do needs to be specified in the plan document. If the lump sum cannot be paid because of the 110% rule, and the plan is silent about optional forms of payment when this occurs, then the lump sum simply cannot be paid and he need to elect some other form of payment that is available. Discussing these other options is interesting, but if they aren't in your plan document, they aren't really options you can use.

Mugs? I never got a mug. Of course, after 5,500 posts, Tom certainly deserves some sort or prize. Thanks Dave for all you do. Great site - head and shoulders better than the COPA Cobanna, but we really should plan some sort of major celebration for next year's 20th anniversary.

FWIW, the Central States Plan is currently negotiating with the PBGC to allow them to reduce benefits in order to delay the inevitable bankruptcy. The theory is that when the plans run out of money, the PBGC will step in and fund the benefit up to the PBGC maximum. The multiemployer maximum is relatively low and therefore would result in drastic benefit reductions. The funds are petitioning the PBGC to allow them to reduce the benefits gradually in an effort to delay PBGC takeover. The PBGC has not issued a ruling, but it is being negotiated. If the PBGC permits central states to do this, your client may be able to attempt a similar resolution. But I wouldn't hold out too much hope that it will produce a viable solution any time soon. Also, if your client is facing an certain plan bankruptcy, they should be aware that the PBGC has already stated that once central states fails, it will take the multiemployer side of the PBGC with it, and without a government bailout (which the republican congress has continually stated will not happen), even the guaranteed benefit will go away.

Sounds like you have a pretty good handle in things. You are going through the correct thought processes. A couple questions about what you said. "The plan has told me that I defer now and start a full annuity at 70.5 (or probably at any time before) the plan will pay me the same amount monthly then as now, and they will also retroactively pay for the months in between." - This is generous on their part and fair. "They also told me that if I defer now and am later able to take a full lump sum they will simply recalculate it then based on interest rates at the time - there will be no retroactive payments." - I am not sure you understand this correctly, because I don't think what you stated would be legal, but I could be wrong. At the very least, it is inconsistent with how they handle the annuity option. You should ask them again if the lump sum you would receive at your late retirement date would include the value of the payments you did not receive. This is not the same as a retro payment, and is often referred to as an "actuarial increase". I don't believe they can just not give you any value for the missed payments. You should also think about death benefits. If you die prior to receiving your payment, what would your spouse receive? If you are not married, is anything payable upon your death? Depending upon your health, it may make sense to make an election now, even thought you don't need the money. Finally, what is a "bug" defense firm? Were you some kind of exterminator or did look for ways to foil others listening devices? And Andy is right on the money, as always. No one on the board can possibly know your situation well enough to tell you what you should do.

Personally I just use the free DOL site, but if you want an alternative to Judy Diamond, try Larkspur Data. You can call: Joni Adair / Vice President, Financial Advisor Division Larkspur Data Resources, LLC "Our Business is helping you develop your business!" 1 (800) 282-4567 ext. 15 I don't know if they are any cheaper, but I always preferred them when we used that type of service.

Also remember that "pay" is the average of the highest 3 consecutive years.

The instant he paid the distribution as a result of the plan termination, the 436 rules ceased to apply. Up until that point, the lump sum was prohibited. Kind of meaningless in a one-life plan, but he was not allowed to receive a lump sum until he paid it, then it was ok because it was paid as a result of the plan's termination.

Probably not a PT, but they may have some tax issues to deal. Hopefully the actual lump sum is higher than they paid, or it could get more interesting.