Effen

I don't see any problem with that as long as you use the same assumptions for the 2009 valuation. Also, remember that the "valuation" isn't really official until you file the Schedule B. Therefore, although you may have released the 2008 valuation report, your assumptions aren't really locked in until you file the 2008 Schedule MB, which will most likely be after you do the 2009 certification.

sounds a little fishy to me as well. I don't think they plan should authorize the change without express written consent of the participant and their (the plan's) attorney.

My hospital clients have received similar requests. I guess I didn't think the request was too onerous; they just wanted a copy of the plan document and the most recent valuation. The bigger question is why are they asking?

I think my reference was meaningless to my question. From what I can tell, the "old" notice is still required for 2007 plan years, but I would be interested if anyone thinks differently.

Just curious, but why would you have a short plan year for the first plan year?

Are the old Pre-PPA Funding Notices (RPA CL / Assets) required for the 2007 plan year or, since PPA changed the requirements do we have a one year exeption as long as we report the 2007 funded percentage on the 2008 notice. Does this site apply?

Andy, There are some old threads dealing with offsets due to prior distribuitons, mostly related to 415 adjustments. That said, if a longer service person takes a lump sum, and if the plan offsets for prior distributions, the chance that the participant will ever see another $ from the plan is pretty small. They would need to accrue a pretty large benefit in order to offset the "value" of what they already received. I don't really see it as "whip saw", I just see it as a choice. They didn't have to take the distribution, the plan could have given them a suspension notice and their lump sum might have declined with their life expectency. The participant chooses $ today and therefore doesn't get $ tomorrow (in most cases).

Seems to me that if you are giving participants a choice then your disclosure requirements go through the ceiling. It might only apply to cash balance conversions, but there were some regs released 5 or 6 years ago that discussed the requirements if you are giving participants a choice between a db and dc. I believe you will need to demonstrate the impact of their decision under various scenarios in order for their elections to be valid. It may be easier to just draw a line and say these stay in the db and these are out.

We generally just put it into the SAR. It usually says something like ... here are the quarterly contribution requirements, this is when they were due, this is when we paid them... I guess I thought that is what "everyone" was doing. Not sure if this still works under PPA. Also, depending on the amount of the missed quarterly it could generate reportable events with the PBGC which has its own requirements.

Usually it is the auditors call if they need the FAS 158 report or not. Generally, non-professional type employers usually need them, but its up to the auditor.

FWIW - I have concluded that my interpretation is correct through conversations with the IRS and other actuaries.

432(b)(1) ENDANGERED STATUS. --A multiemployer plan is in endangered status for a plan year if, ... 432(b)(1)(B) the plan has an accumulated funding deficiency for such plan year, or is projected to have such an accumulated funding deficiency for any of the 6 succeeding plan years, taking into account any extension of amortization periods under section 431(d). 432(b)(2) CRITICAL STATUS. --A multiemployer plan is in critical status for a plan year if,... 432(b)(2)(B)(i) the plan has an accumulated funding deficiency for the current plan year, not taking into account any extension of amortization periods under section 431(d), or Lets say I have a plan that is "green", but has a funding deficiency approaching in 9 years. I am therefore eligible for and take the automatic 5-yr extension under Section 431(d). This extension solves my credit balance problem and I am free and clear, BUT, since I can't recognize the extension to determine if my plan is in Critical Status, I would fall into critical status 6 years from now when IGNORING the 5-yr extension I have a credit balance problem in the next 3 years. Is that the way you all understand it?

How can you have a "Hi 3 grandfathered around $300K" when the current max comp limit is only $230K? I guess I'm still a bit confused by your question. The 415 $ limit is determined based on the current year and the individual's current age. What happened in the past doesn't impact that. Once you know their current limit, you may decide to offset it for prior distributions, or not.

I haven't though through everything, but just remember that under PPA, the 415 limit is only actuarially increased for retirement after age up to the comp limit. In other words, the comp limit is the ultimate limit regardless of age. It is still an increase, but its not the big increase it once was. I guess you might be able to argue that he "accrued" it prior to the clarification in the Regs, but that is for lawyers to fight about. There is some debate/discussion about how you adjust the 415 limit to recognize prior distributions if at all. You might want to search the board. Personally, assuming all your ducks are in a row on the document, I don't have any real problem with what you are suggesting, assuming the big guy is still working and earning service credits. You might want to look into the possiblity of discrimination against past participants - were there other participants at the time he started to receive his benefits?

no - they are complete "free-bees"

Its not only restricted, its frozen. Did they notify the participants? Ignoring all the implications of the non-certification, I believe you can prepare the certification now and unfreeze it retroactively to the first day of the plan year. I don't remember whether you need to amend your plan to unfreeze it, or if it unfreezes automatically with the certification.

I don't think it is a problem. I have a plan that does it, the IRS has reviewed it and issued a determ letter. No different than any other career average unit credit formula - partial years are ok with them.

"you ain't cheat'n if it legal!" - Barry Bonds (actually I lied about the Barry Bonds part)

AEA, I think you are missing Calavera's point about the actuarial increase. Assuming no changes, the NRA is earlier of 65 or satisification of Rule of 85. So, if a person is hired at age 25 and works every year until age 55, their NRA would be 55. If that person continues to work until age 65, are you actuarially increasing his benefit from age 55 to determine his benefit at age 65? Now to your question, the rule of 85 is fairly common in "real" retirement plans, I hope the IRS won't give you any trouble. If they do, they will have boat loads of unions on their case. You can only change NRA prospectively. Any benefit already accrued must still have the rule of 85 attached to it. You could change if for future accruals, but then you need to be careful with benefit calcs. You may be able to get around some of this if your plan allows you to give suspension notices instead of rollups, but then you need to make sure you issue the notices as soon as the participant has met the rule of 85.

Sorry, I moved you back. I don't work on any multiple employer plans, but I always thought the document defined those types of issues.

Grumpy - I moved your topic to a more appropriate board - I only hope the other dwarfs will find it. I assumed you were asking a multiemployer question, but now I'm starting to wonder if it was a PBGC notification question? Basically whenever an employer ceases to have an obligation to contribute a withdrawal has occurred. This typically happens when they negotiate out of a multiemployer plan. But there are several other types. A mass withdrawal is when all the employers withdraw at the same time. A partial withdrawal occurs when a contributing employer has a decline in the number of base units. The amount of decline needed to trigger a partial withdrawal differs by industry. Partial tend to occur if the contributing employer closes a location or if their workloads decline. Ultimately it is up to the plan to inform the employer that they are being assessed a withdrawal payment. There can be some facts & circumstances involved, but it’s usually fairly black and white. Do you have a more specific question?

Anyone else want to chime in on this? I'm curious what others are thinking.

It depends on what “PVAB” means. Since you referenced funding, I assume you mean "Funding Target", if so, then I definitely disagree with you. The funding target would be based on the accrued benefit (monthly annuity at expected decrement age) times a factor based on the segment rates. If your interest crediting rate is lower than the segment rates, your funding target will probably be lower than the sum of the account balances.

Interesting timing ... I was just looking at these same issues myself. I think we are on the same page, but I'm not sure about the paragraph. You also need to project for testing purposes if your plan needs to be general tested, so your conversion factors may be important. Seems correct. I'm not so sure you don't have a 411(d)(6) issue, although I'm not sure. I'm thinking your actually have 3 interest (and mortality) rates that are important: a) interest crediting rate - market related rate used to accumulate your cash balance account from one year to the next, b) cash balance conversion rate - rate (interest & mortality) used to convert the cash balance account to an annuity either immediate or deferred, c) actuarial equivalent - rate (interest & mortality) used to convert the annuity into other forms of payment, other than lump sum. I think I agree that the interest crediting rate can be change without a 411(d)(6) violation (assuming you follow procedures in the Regs), but I'm not sure about the conversion rate. For example, if pre-ppa my plan used the 30-yr treasury for all three (crediting, conversion, equivalent) would it be a 411(d)(6) issue if I changed the conversion rate to a flat 5%? Or if my current plan says to use the 417(e) rates for conversion, can I change that to a flat 5%? Granted my lump sum doesn't change, but my monthly annuity will probably be lower using 5% than it would have been using current 417(e) rates, so if I change the basis of my conversion rate and the annuity decreases, would that require a 204(h) Notice? I guess I am envisioning using 30-yr treasury rates for the crediting rate, 417(e) for conversions (or maybe a flat %), and a flat % for actuarial equivalents. Any comments from the gallery?

I believe 2008 is a "good faith" year so there may be an opportunity to have the ER re-designate $5K of the 1st payment to be used to partially satisify the 2nd quarterly. That assumes he "designated" the $50K as his first quarterly. If they just deposited it, without any particular designation, I would just have them do it now. I don't know if or how you can change a designation in 2009, but I'm hoping that by the time 2009 comes around, we will know.