Effen

Not that this addresses Andy's (the actuary) point, but all of the other cost methods are still in use in the multiemployer world. Only single employer plans are forced to use the new PPA method. I think this also helps AndyH (the non-actuary?) justify his position that 00-40 is still active. There are still lots of plans using other funding methods.

I think I would question the reasonableness of your funding method. I would probably treat the accrual as normal cost, even though you could argue it is liability. Couldn't you have a similar issue in 2008 as well? If AL you amort over 7 yrs? Either way, I would argue the only "reasonable" method would be to treat it as normal cost - although if it is a situation where you were trying to save someone from a deficiency, I might be temped to treat it as AL, but it wouldn't be my first choice.

SoCal - "Extremely common in small plans." ??? Maybe in SoCal, but I'be been doing large and small plans for 25 years and have never seen it in any size plan. We just must be behind the times over here in the East. What are the advantages of doing this? What are the disadvantages?

We have generally found the EBARS to be correct, if you code everything correctly. They had some problems doing "MVAR", but they have corrected it. There are just so many variables and so many things that need to be coded correctly, that if you don't know what the answer should be, you probably won't get it. When we first got it we spent a lot of time going through the coding. It still doesn't do everything exactly as we would like, but I think we are generally happy that the results are correct. It can be a little quirky, but no worse than any other system. Like I said, it will let you produce results that are clearly wrong, so you need to know what is right. If you do know what is right, we think it works fine. We use to do everything on spread sheets, but found the calculations were just getting too complex to do everything correctly. Plus, we wanted something a little more user friendly, but ultimately decided that the DB/DC stuff couldn't be passed down very far anyway - just too many variables.

We use ASC and it works fine as well. I know people who use Datair and it seems to work also. Maybe one reason people don't respond to this type of question is that no software works any better than the person using it. If you know what you are doing, they probably all can be minuplated to do what they need to do. If you don't really know what you are doing and you are hoping the software will do it for you, then you are in for a whole lot of misery (or maybe blistful ignorance). We have found that DB/DC combined plan valuations and testing isn't generally the type of thing that can be "passed down". Lots of chances for big errors and the software will not only let you hang yourself, it will also give you the rope and the stool.

The December rate was 4.53 http://www.irs.gov/retirement/article/0,,id=96450,00.html

I voted for information purposes although you need to add all the obvious caveats - that we know you just can't pick a rate and the actual rate should depend on the demographics of the plan and the yield curve applicable to the anticipated payments stream bla, bla, bla...

I'm curious what others are doing about partial ages under the new lump sum methodology. Are most taking the "easy" way and interpolating between ages or are "right" way using the 1440 line approach mentioned by timesup in a prior post

Maybe, but even if they fix it before 1/1/09 what are we to do in the mean time? I have clients who would like to make distributions and I need to pick an accumulation rate. Since most of ours use the 30-yr Treasury rate, it seems the only reasonable way is continue to use the 30-year treasury for 2008, then change to 3rd segment (maybe?) in 2009. It may depend on what the relative value disclosures look like.

Assuming the current accumulation rate is based on the 30-yr treasury rate, since the 3rd Segment rate stuff is in "(d)(4)" and the 30-yr treasury (old standard) is in "(d)(5)", doesn't this mean that the Plan needed to be amended by November 30, 2007 in order to use the 3rd Segment rate starting 1/1/2008? Seems to me since they didn't release this until 12/28, it would be difficult to use the 3rd segment rate as of 1/1/08. I guess you could change it mid year, but that seems like a pain. I suppose we need to keep using the 30-year treasury rate for 2008. Am I missing something?

FWIW, I had a situation last year where the client wanted to put real property into an escrow account to cover a distribution to an HCE. I had several discussion with head of the VCP/CAP program in my district who ran it past the national office and came back with a big "NO GO". They were very clear that real property is not acceptable. They said only cash money would be acceptable for the escrow solution.

Seems to me that since the fund knew a DRO was in the works, it should not have commenced payments to the participant. I'm not sure of the sites, but I believe it should have escrowed the payments for a reasonable time until the DRO issues were resolved. Also, did the plan get spousal consent to start the payments to the participant or did they hang their hat on the "he is single" hook? What ever you do, make sure the fund's counsel is on board.

I think Andy may be on to something. If this person terminates, I think they would be a Highly Compensated Former Employee, however, while they are active, they are a NHCE. Interesting... I would explain Andy's point to their ERISA attorney and ask him/her to make the ruling. I wouldn't want to be on record saying it was ok to pay it, but I would explain it to the client and their attorney and let them make the decision.

I agree with Rcline. If you searched your records the next step would be to have the employer check the payroll records and see if he ever worked there. If you have no record and the employer has no record, this person would need to prove they did work for your client and that they are entitled to a benefit. As far as seing an old SSA, I don't know of any easy way. Did you try the accountant? Often times they keep copies of old 5500s.

Andy, you might not be aware but commutation factors are back on the EA exams! The ban has been lifted! That said, I haven't thought about lump sum factors yet, but I will soon.

You mean other than asking the person who prepared or filed them for a copy? Why are you looking for them? Maybe there is another way to solve your "problem".

I have asked several attorneys this question and they all tell me "no". No one seemed too concerned about the need to add QOSA J&75 option, even if the option wasn't in the plan. Any attorneys want to chime in?

I think I would say "a", assuming the 120,000 415 limit properly reflects the fact he has < 10 years of service and participation. I think the 415 limit is a final check. Calc the benefit payable under the plan, then check it against the 415 limit. There is no vesting schedule applied to a 415 limit.

Thank you, that is helpful. Excuse my ignorance, but what does PEO mean?

What if it is a multiple employer DC plan? Assume many unrelated employers adopt the multiple employer plan. They all invest in various pooled accounts. Would that satisfy the "all the assets of which are available to pay the benefits claim of any eligible employee" requirement because they are pooled accounts, or because each dollar of each fund is allocated to an individual, it should be considered "seperate funding" and therefore each adopting employer should file a 5500? I'm looking at a multiple employer PS/401(k) plan that each employer picks their own employer ps allocation and matching formula. I'm having trouble determining if they should be filing one 5500 or if each employer should file their own 5500 since all of the money is allocated to individuals? The Plan document contains an exclusinve benefit rule that states "All contributions made by the Co-sponsor will be used for the exclusive benefit of the Participants who are Employees of the Co-sponsor and will not be used for nor diverted to any other purpose except the payment of the costs maintaining the plan." It seems to me that each co-sponsor should be filing their own 5500. Agree?

It may not be a 204(h) Notice, but there is notice requirement. Act Sec. 101. (j) NOTICE OF FUNDING-BASED LIMITATION ON CERTAIN FORMS OF DISTRIBUTION. -- --The plan administrator of a single-employer plan shall provide a written notice to plan participants and beneficiaries within 30 days -- (1) after the plan has become subject to a restriction described in paragraph (1) or (3) of section 206(g)), (2) in the case of a plan to which section 206(g)(4) applies, after the valuation date for the plan year described in section 206(g)(4)(B) for which the plan's adjusted funding target attainment percentage for the plan year is less than 60 percent (or, if earlier, the date such percentage is deemed to be less than 60 percent under section 206(g)(7)), and (3) at such other time as may be determined by the Secretary of the Treasury. The notice required to be provided under this subsection shall be in writing, except that such notice may be in electronic or other form to the extent that such form is reasonably accessible to the recipient.

I would probably say they are SOL until 2008, but then I'm a bit conservative on this kind of thing.

Do a search of the board and you will find lots of creative solutions. I'm sorry to say there is no perfect answer. Have they really made an effort to find the person? Have they used a search firm to try and find them?

Come on, lets be realistic. Boston and New York should just play a best of 164 schedule since they are the only two teams that "anyone" cares about - at least those East of Syracuse and north of Jersey. The winner of those two would play the best of the other teams in the World Series. Or maybe the winner of the best of 164 just has home field advantage, and then they play each other again in a best of 7 for the World Series. I guess either would work. If you consider beating up your little sister an accomplishment, then you are ready to be a Yankees or Red Sox fan. They spend 2 - 9 times what other teams spend on payroll and then you celebrate like you accomplishment something when they beat them. Sorry, you guys are suppose to win and when you don't the rest of the country celebrates.

Double Post - See Defined Benefit Board