Effen

Carol Z confirmed that with me a while back. However, keep in mind that the person will be vested in no more than 2 years, therefore there is only a 2 year discount on the value, so the difference between the cash balance accounts and the real at-risk liability is relatively small. I'll let you decide if it is small enough to ignore.

Because Congress thought that would make pension funding too easy and they wanted to protect the jobs of all the actuaries. I think some claimed during the recent campaign that they saved 4,000 jobs just by making pension funding more complex.... The cash balance account is projected to expected retirement using the accumulation assumption, then discounted back to attained age using the segment rates or yield curve. Currently the segment rates are generally higher than the accumulation assumptions, so the funding targets are less (sometimes significantly) than the actual cash balance account. However, most people are using the sum of the cash balance accounts as the "at risk" funding target and therefore would preserve the deductibility of a contribution sufficient to bring the plan to 100% funded based on the cash balance accounts.

I think I misread your original post. I didn't realize that this reciprocal agreement was being signed after the participant earned a benefit. I thought you were saying there was a reciprocal in place, but you just didn't know about it. I would agree that you have a different problem if there was no agreement in place at the time the participant earned the benefit.

Even though you changed RA to 62, it should have only applied to post amendment accruals, otherwise you have a 411(d)(6) violation. Benefits accrued prior to the amendment are still payable at 55. If the plan now delays the right to receive that benefit until age 62 or seperation from service, I think you should actuarially increase the benefit payable at age 55 until the distribution or anticiapted distribution date, not to exceed the 415 limit for that age.

Really? Reciprocals have been around a long long time and every multi I ever worked on used them. It wouldn't surprise me if they don't understand how to pound them into their square holes, but this horse left the barn long ago. I would tend to look at BRich's "problem" more like he never actually earned the benefit because he was never really a participant in the plan. You only thought he was a participant, but in fact due to the reciprocity he never really was. There is no 411(d)(6) violation because there was no benefit accrual. Data is always in issue in db plans. People are given statements for years only to find out later that they were never really vested. I would call it a data issue, not a 411(d)(6) issue.

Proprietary or not, the plan sponsor certianly has a right to know the full table used in their valuation. If the prior actuary won't give it to you, ask the sponsor to request a copy of it.

A couple of thoughts: Do you see this on your pay stub as a deduction, or did someone just tell you that the plan costs 7 cents per hour? If it is an actual employee contribution, it must be 100% vested. Even if you are not vested in the employer provided benefit, your employee contributions would be returned, plus interest. (I assume this is not a union shop?) Yes, they are required to furnish all participants with a statement every three years. If they are taking money out of your pay, then you are a participant, even if you are not vested. My experience is that not all employers are "on board" with this requirement yet. I suggest that you formally request a copy of your statement.

We happened to read Section 6.6 of the McKay Hochman prototype db document and realized it contained what we thought was distressing language. Distressing primarily because we never knew it was there. So, the appears to imply that even if the plan coded the death benefit to be the minimum REA QJSA (J&50 - spouse only), that upon the attainment of Early Retirement age, ANY participant can elect a different death benefit. Therefore, a single employee can elect a lump sum (assuming that is an available option) death benefit. If that is true, it becomes impossible to use McKay Hochman prototype for a sponsor that only wants the minimum death benefit. Do McKay Hochman users provide election forms for participants attaining early retirement age? Could the estate sue the plan if they don't make this clear to the participants? "If dad would have known he could have elected a death benefit, he certainly would have elected a lump sum" Anyone else familiar with this provision?

With IRS submission we generally say 9-12 months, if PBGC only probably talking < 6 months. That timing is from the date they tell us they want to terminate.

http://www.whitehouse.gov/blog/2010/09/27/...-learn-whats-it

yes, it is possible, but the plan needs to contain the proper language. Typically the problem is properly defining the suspendable employement. There are fairly strick DOL rules for this involving the type of work and location which sometimes Trustees would rather ignore. I'm not positive, but I don't think it can be applied retroactively. I think that was the issue in the Heinz case? http://www.mwe.com/index.cfm/fuseaction/pu...0e5d340c97c.cfm

I have re-read the statutes and humbly withdraw my appeal.

If it is unclear you need to look at past precedents and ask the sponsor for an interpretation. Don't take the responsibility for interpreting a plan provision that isn't clear. Unless you are the plan sponsor, this shouldn't be your call. For me, it says to reduce for fractional years, that means interpolate in my book, but obviously, it isn't my decision.

Q1: http://benefitslink.com/boards/index.php?s...od+change\ I'm calling a change in the month of determination an assumption change and I'm calling a change from segment rates to yield curve a method change.

Lance, Could you supply a reference to this bill that was passed? I see several bills that passed in the Senate, but haven't seen anything about a bill passing both houses or anything awaiting the President's signiture. (Other than on one of your other sites.)

Smash - good to have you aboard. I agree with everything you said, except that the Trustees do not control the assumptions used for the withdrawal determination. Like FASB assumptions, I think the withdrawal assumptions are completely in the hands of the Trustees. They can ask for direction from the actuary, but ultimately they can set them where ever they want. If they actuary doesn’t agree, he/she can caveat the calculations. I look at them the same way I look at FASB assumptions. That is, the actuary is just doing the calculations based on directives from the Trustees or Plan Sponsor.

To me that is still one of the open questions. The notice says "all participants" must receive the AFN, but it never defines as of what date. Forgetting about a plan termination for a second, what about an ongoing plan? All participants at the BOY or EOY? What about participants who terminated non-vested during the year, or even in the subsequent year, but before the notice is distributed? What about participants who die without a beneficiary? I think the safe answer is to give it to all participants as of the first day of the plan year, but I'm not going to argue with a client who wants to have a different interpretation.

You could always come to Pittsburgh - we are on the brink of having the worst road record IN BASEBALL HISTORY! Like my daddy always said, if you are going down, go down in with style. Regarding the "catholic" bear, I assumed you were using the word for it's actual meaning, to which I ask, is the bear catholic what? Is the bear catholic in agreement that he is smarter? Does the bear catholic care if Yogi was a catholic?

I heard Holland say many times the final AFTAP needs to match the SB, so I truncate in both places ... sometimes even using my real name.

Seems like you answered your own question - SB instructions say truncate. We're truncating like good little children.

May or may not be true depending on the 2008 ratio. I believe our esteemed congress gave one more year's "relief" on that provision.

I would say file without the audit. The return may get bounced for not having the audit report, but hopefully by then the audit will be done.

Thank you both. I think Bird makes a good point. Since the plan has excess assets, there is a potential reversion to the corporation and therefore it has some value, so it is hard to argue the stock is completly worthless. We'll probably prepare the full 5500, even though the Schedule I will show $0 for non-exempt assets.

No, it has a sponsor. The company still exists, but in name only. Lets say XYZ corp manufactures soap and sponsors a plan. At some point the sole owner of XYZ corp sells all of the assets used to make to soap to Zest, Inc. XYZ corp. still exists, but after all the bills are paid, all they have left is the plan. The owner of XYZ still maintains the plan, and the plan still holds some shares of XYZ corp in the trust. However, XYZ corp isn't worth anything because at this point, it is just a corporation whose sole asset is the plan. The plan is very overfunded, but the owner is content to sail around the world and doesn't care much about the plan and doesn't need the money, so it just sits, and we continue on with a plan full of vested terms and retirees. So, do the worthless XYZ corp shares preclude me from preparing an SF?

I have a plan where the plan sponsor went through an asset sale a number of years ago. The plan has been frozen forever and is significantly overfunded. The corporation that sponsors the plan doesn't really exist anymore, yet the plan still holds shares of the company. The auditor has determined the value of these company shares to be $0. Company stock would clearly be a non-eligible asset and therefore preclude the sponsor from filing a 5500-SF, however, the sares have no value. Since they have no value, do you think they would be permitted to file the SF?