Effen

I'm just saying the death benefit is exempt from the top 25 restriction. You still need to follow the terms of the plan to resolve the actual benefit distributions. Just because the primary died, doesn't mean the sponsor is dead. The termination of the underfunded plan may not have been proper. Did you file it with IRS? You need to follow the provisions of the plan and pay out benefits accordingly. That could mean everyone gets less, it could mean the plan needs to be funded. You need to be working with ERISA counsel. I'm having trouble finding a cite, but I am sure it is true. I will keep looking, but maybe someone else can jump in. I have worked with the IRS on several top 25 violations and each time they state if the person has died, there is no problem. It may have something to do with the fact that the restricted employee is dead and the beneficiary is not necessary a restricted employee. I had a cite once, I will keep digging.

Death benefits are exempt from the "top 25" restrictions. Are there other participants in the plan? If so, are their other HCEs?

??? I don't understand the question. The impact on the plan is the same (other than the cost) whether it pays the participant in the form of a lump sum or it pays the insurance company for the annuity contract. Before the plan termination the money was an asset of the plan, after the termination it is a asset of the participant. A few more details would be helpful. Why are you asking?

Lets say on 1/1/06 an active participant over age 65 received a lump sum based on an accrued benefit of $7,600/mo. life only. The lump sum was paid, based on the 417(e) rates in effect. The amount was $912,000. The participants 100% comp limit was $8,000/mo. and using 5.5% also produced a lump sum of $912,000. Therefore, even under the post PPA 06 method, the lump sum was permitted. It is now a year later and the participant has "accrued" an additional $300 under the terms of the plan. Question 1 - is it possible to pay this $300 as an annuity w/out violating the 415 limit or because the participant received a lump sum equal to 100% of comp, no additional accruals are permitted? Question 2 - If 3 years from now the participant increases their compensation limit to $18,000, how should I value the previous lump sum that was paid? Would I roll it up using plan factors, 417(e), 5.5%, none?

Thank you.

Does anyone have any relatively recent disability tables they could share? I’m looking for incidence, not disabled mortality. I have the old UAW tables and a table from 1985, but I was wondering if anyone has anything more current. We looked on the SOA site and didn't really find anthing. We are looking mostly at blue collar groups (1,000 lives) and as we update mortality to one of the RP2000 tables, using a 1955 disability table doesn't seem reasonable.

Is this a bargained plan? I have seen some union plans where the bargained contribution gets carried from the contract into the PS document. I'm not saying if it is correct, but I have seen it.

I wouldn't go that far. I'm not saying you shouldn't do it, but I wouldn't want to be to one to tell the client "they have nothing to worry about." I usually realy on the ERISA attorney for they type of statement. Anything beyond 5 years has some risk to it. If the client understands this and decides to do it, then it is his choice. I generally stay out of legal opinions.

Take a look at §1.401(a)(4)-5. Generally, you can't grant more than 5 years of past service without having to demonstrate it is non-discriminatory. Also, you can't accrue more than the 415 limit, so the most he could have at the end of year 1 is 10% of the 415 $ limit. The % pay limit is based on service, so it might be ok.

TREATISE, PENSION-ANSWER-BOOK, Q 5:35 What is an affiliated service group?

"You spin me right round baby, right round, like a record baby, round, round, round, round" Search the DB board for a lot of discussion about this circular topic. Personally, I don't think you "benefit" unless you actually receive an annual addition during the year. I recognize others don't share this opinion.

Shouldn't that be Prrrrr?

Why do you think you will loose a deduction?

Be careful of 411(d)(6). Assuming it is a CY plan, you can't just change benefit rates this late in the year unless they are all increases. I wouldn't change to EOY val as PPA virtually requires BOY vals starting in 2008. Why can't you do testing at EOY and valuation at BOY? You can still do them at the same time, except different years.

Lots of discussions about this on the defined benefit board that you might want to check out. At this point I believe we are awaiting Regs to determine exactly what this provision means.

1) yes, in fact you may see more of this with the pending PPA changes. It's an extreme solution, but sometimes you don't have a choice. 2) I don't know nutt'n 'bout no Davis Bacon.

Since no one else has responded I will throw in my 2 cents.... This type of tracking mechanism is fairly common, although I usually see it referred to as an "hours" bank, not a "dollars" bank. I would imagine that no actually money is being segregated, but the fund is just using the technique to determine who is eligible for benefits in the quarter. Most health funds are funded like defined benefit plans. All of the money supports all of the benefits. Although the contribution amounts are based on so many $/hr worked, the money doesn't get credited directly to any specific participant. The hours bank or dollars bank is just a way to help the fund keep track of who is actually working and who should receive health benefits.

I agree, they are "SOL"

I agree 100% vesting is required for a partial termination, but I don't agree that freezing of benefit accruals automatically results in a partial termination. However, my answer was too specific and ignored that important consideration. Thanks for the clarification. dmb: You need to look at the specifics of your situation. I assume you have CCH or RIA or whatever and you should research this as it applies to your client.

Freezing benefits never requires full vesting.

I have a client that recently had an "awakening" with regards to their insurance broker. The guy had lots of whole life insurance policies inside and outside the db plan. There was also some large stock re-purchasing contracts outside the plan. Is there anyway the policy holder can find out exactly how much the agent has received in commissions? The "commissions paid" was generally left blank on the previous Schedule As. Does the policy holder have a right to know this information? If so, will the insurance company provide it if they are contacted directly?

I don't agree. Although the funding rate is a very common assumption for w/drawal purposes, it is not absolute, in fact Segal generally uses a PBGC based set of rates for most of their clients. Do you have any basis for your statement?

Funding is based on long term assumptions since the plan will continue into the future, but the w/drawal liab. is based on immediate assumptions, recognizing the fact that you the employer are w/drawing and you need to cover your share based on today's rates. Just like in the corporate world (pre PPA) where you funded the plan based on longer term rates, but you still had to do calc the Current Liability to see if you needed to put in some extra based on current rates.

This question probably belongs on the multi-employer board. That said, it is very common to use one set of assumptions for w/drawal calculations and another for funding. Two different purposes, two different assumptions. What you describe is a very common method for determining w/drawal liability. For example, most of Segal's plans use a PBGC rate based set of assumptions for w/drawal calcs.

What am I missing? This seems to agree with my position that the lump sum should not be paid at all, unless the plan document permits AP's to receive one. You said before that you treat the QDRO like a plan amendment. Did you mean you treat it like a plan amendment that only applies to one person or would it apply to all future APs? What if that one person was an HCE and the DRO awarded the AP 100% of the participant's benefit to be paid as a lump sum. Seems like a nice way to get a lump sum out of a plan that otherwise can't pay one. May be worth the cost of getting a sham divorce.