Effen

How would that result in getting attached to the wrong employer? If someone was using someone elses SSN, that doesn't get it attached to my client. The only way someone should get the letter from Soc Sec. is if they were reported on a 5500 SSA w/ my clients EIN, but they weren't. I have to believe that some employer somewhere is using my clients EIN, or there is a screw up with the SSA.

Has anyone else been seeing Social Security Notices for people who never worked for the Company they say owes them a pension benefit? I have a client that has received letters from two different people in the last few months; each enclosed a copy of the SSA notice with the clients EIN, Plan Name, Plan Number stating that the person should contact them for their pension benefit. The problem is they never worked for the company. They have both been resolved quickly with a phone call to the person. Both admitted they were surprised to get the notice and agreed that they never worked for them. Both Notices stated they were based on a 2004 SSA filing. Anyone else having a problem? Maybe someone filed an SSA back in 94 with the wrong EIN and they all got attached to our client. It just seems a bit strange, once I can understand, but now this is two in two months.

I agree that you can't dilute the message, but 2520.101-4(b)(8) clearly states that you are permitted to provide additional information that is helpful to understanding the mandatory information.

Would anyone be willing to share what kind of cover letter they are planning to attach to the new Funding Notices that need to go out this year for multiemployer plans? The notice requires disclosure of the funded ratio based on RPA Current Liability and Actuarial Value of Assets. This can be terribly misleading, especially in the multi-employer area. I was planning on attaching a cover letter explaining that the notice can be misleading, that it is required, and stating the funded ratios based on market value and a more reasonable interest assumption. I assume that others aren't just sending the notice out blind, and was hoping someone might want to share how they handled it.

Tintree, I'm not a lawyer so I don't know all the legalities, but from a practical basis, the funds generally file suit and try to collect all unpaid contributions. If a contributing employer goes bankrupt, they would become a creditor and collect a percentage like everyone else, although I’m not sure what priority they are assigned in the bankruptcy. If it is a DB plan, the participants generally get the benefit based on their service, even though the employer never actually contributed any money. This becomes an actuarial loss and is spread among the other employers. If it is a DC plan, the participants may just be screw'd. Some funds create penalty delinquency funds which are used to make up the losses for participants. The accounts are funded through penalties assessed to delinquent employers. In other words, if an employer is late with a contribution, they are assessed a penalty. The penalty goes into a different fund and is used to pay the participants share for employers who don't pay.

What exactly do you mean by a cross tested db plan? Are you converting the benefits to allocations and testing on a DC basis? If so, what advantage does that have?

Sorry Janet, I guess I never realized you worked for a plan sponsor. I know you said you were the plan sponsor, but I just assumed you worked for a service provider (actuary, accountant, TPA). I am still curious ... all you service provider types, are any of you "signing" as Plan Administrator?

Janet, I'm curious, if you sign for the PA's, do you ask them to sign something confirming that they have reviewed the filing and give you authority to "sign" it? We have one client who still doesn't have an email address.

Yes, could be lots of people involved. What we did is sign all of our clients up. In the process, you designate different people for differend tasks. ie :CFO to review, Pres to sign, etc. Usually we ended up signing up at least two people at the client. Once that was done, MyPAA sends them each an email asking them to sign in. They choose a user name and password. MyPAA then kicks you back an email saying that they have signed up. Once everyone is signed up, you prepare the form then "release it" to the client for review. If the person who reviews it is not the one who signs it, they have to "release it" to them for signiture. Then they release it to the payor. In our case... ME (signer upper) -> CFO (review form) - > Pres (sign) -> CFO (payment) -> PBGC I also think you are correct that we now "own" the client, since we signed them up, which will make it interesting for takeovers in the future, although I think you can release them somehow. Its kind of a pain, but I didn't think it was too bad. Also, you get to see a lot of history for the client that you may not be aware of. Yesterday we found an $5,000 credit for one of our clients from 1998.

We have used it. Are you a plan sponsor or a filing preparer? What do you mean by "which method"? Did you mean which "payment" method?

taken - no, contemplating - yes. I agree it is drastic, but there are two sets of trustees (employer/union). The employer trustees need to determine if it is in the best interest of all the employers to terminate the plan in a mass w/drawal in order to capture more $ from those ER's who were going to w/draw anyway. If the plan is going down eventually, why let some of the employers get away with a smaller share of the liability? I'll be honest, I don't really know how the machanics will work, but we have a few plans looking at the idea of a mass w/drawal if they can't qualify for relief under 412(e).

Plans which are in serious financial problems can have a "mass withdrawal". I believe the Trustees could initiate this. Basically, the plan is terminated and each employer is allocated a portion of the termination liabiltiy. There are pros/cons for a mass withdrawal, but the biggest difference is that the w/drawal liability is based on termination rates. This can cause the w/drawal assessments to increase dramatically if the fund was using funding rates to determine the w/drawal amounts. There is also a look back rule that allows the fund to re-calculate and re-asses employer who have w/drawn during the last few years. Also, I don't think the 20 year rule is applicable in a mass w/drawl.

That is the way I understand it... 3.95% PBGC premiums, 5.10% RPA calcs, 204(h) notices for everyone! Time to start studying for my CFP exams...

I believe so, but I'm not sure. It all may be for not since from what I here there is a very good possibility that nothing is going to get passed. Milliman Newsletter This article sounds more possitive than what others closer to the action are saying. The DOL may actually be pushing for "no action" since the low interest rates will generate the needed increases in contributions.

As long as we agree on the important stuff.

Dirty Harry didn't say "failure to communicate", it was "Captian" in Cool Hand Luke.... "What we have here, is a failure to communicate". I'm not a PA, but think I understand what you are saying. I would still tell them to go back and bring me a DRO. There is lots of stuff in the divorce decree that doesn't belong in the QDRO. I wouldn't want to bear the added administrative expense to sort through it. What if you miss something? Taking shortcuts with this stuff is what leads to law suits down the road. Hopefully. I really feel it puts the PA in a bad spot (rock/hard place) if they get involved trying to interpret divorce decrees. They really have no authority to do so.

Even if it is submitted, the PA should inform all parties that it will not be considered. Just because it is submitted, doesn't mean they have to read it. The QDRO procedures should probably outline the process. It is not the role of the PA to interpret the divorce decree. Two lawyers and a judge already approved the DRO before the PA gets it. I know there are sometimes inconsistencies, but the PA should stay out of the fight. What they don't know can't hurt them in this case.

I have never seen a divorce decree used as a QDRO. I'm not saying it isn't possible, but I have never seen it. Maybe you meant the divorce decree can be drafted to serve a dual purpose? We, and most attorneys we deal with, recommend to our clients that they don't even look at the divorce decree. They should only review the QDRO. It isn't the plan administrator’s responsibility to make sure the QDRO matches the divorce decree. The last thing you want to do is get involved in that type of dispute. All that said, if the AP tells you she is in the process of obtaining a QDRO, then you would be within your rights to hold the participant’s distribution for a period of time. Otherwise, if you don't have a QDRO, the plan has no authority to hold up the participant's distribution. Check your plan document for QDRO procedures.

One issue off the top is the union. Are they three seperate agreements? Are they three seperate unions? Doesn't he need union approval to merge the plans? Negotiations could become more complex if the union wants to know how well funded status of "their" plan. How is the employer going to negotiate if they don't really know how much a particular benefit formula and employee group is costing them? You may find yourself doing seperate valuations anyway, even though they are all one plan. Also, since they will have a right to the valuation report, I hope all the benefits are all comparable, otherwise he will start hearing a lot more about what the other guys are getting. The potential head aches can go a long way in offsetting any potential admin savings. If I remember right, you don't really need to do the list, you just need to maintain the data necessary to prepare the lists if the plan should terminate during the next X years. I would hope they maintain this type of data anyway.

Andy, she has 25 yrs at NRD, but only 4 currently. Based on what you wrote, "A Participant's Accrued benefit is based on a retirement benefit formula ... computed to the nearest five hundred (500) dollars" seems like the AB is rounded to nearest $500. Therefore, 7200 / 12 * .03 * 4 = 72, rounds to $0, but may get TH min if doc provides. That said, this has got to be one of the stupidest formulas I have ever heard of! What reason would you have to round to the nearest $500, other than restricting the bens for lower paid people. Sounds like a discrimination issue. A $20K ee would need 5 years of service just to accrue a benefit, then they would have to work 10 more to get an increase. How does it pass 401(a)(4) and/or 410(b) when all the short service NHCE gets $0?

No, I think you are comparing apples (lump sum @ 417(e) rate) to oranges (QJSA @ plan rate). The comparison needs to be on the same basis, otherwise it isn't valid. I'm not 100% sure, but I believe the Regs state the QJSA needs to be compared to the lump sum using 417(e) rates.

Since no one is responding, I will give it a shot. I think the only logical answer is #2. In #1 you aren't really comparing anything to the value of the QJSA. You are just comparing one lump sum to another, and only one of which is actually payable. It’s a meaningless comparison. You need to compare the value of the lump sum to the value of the QJSA using the same factors.

Do you really want to cause all that HR turmoil if the BOD ultimately decides not to do it? They could always announce the freeze, then un-freeze it if the BOD decides against it.

Thanks for the site. I agree it c/b exempt.

Can't be a Key if his comp is only $60K. I not aware of that "exemption" for 401(a)(26), do you have a site?