Effen

I assume the assets exceed the max 415 lump sum, otherwise you could just terminate it. I think it could be difficult to explain to the IRS why you paid a benefit to a disabled participant that exceeded the maximum benefit payable to a heathly participant.

I realize that there are lots of issues related to the QDRO including the death benefit and whose lifetime is the benefit payable. However, I am only trying to resolve a specific question related to the retirement benefitt payable to the X. Lets assume that the X is not entitled to any subsidy, unless the participant receives it. Lets assume the participant and spouse are both age 60. Lets also say that X wants her benefit today, and the plan & QDRO both said she could have it. Lets assume the plan uses staight actuarial equivelants for early retirement reductions. If NRD under the plan was simply 65/5, I would calculate the participants benefit payable at age 65 and actuarially reduce it to age 60. If the NRD was 62/5 I would calc the benefit payable at 62 and reduce it to age 60. If the NRD was 65/5 w/ an un-reduced early available at 62/30, I would calculate the participants benefit payable at age 65 and actuarially reduce it to age 60. If the spouse subsequently retired, and took the unreduced at 62/30, I would recalculate X's benefit to reflect the subsidy. Now, if the Plan's Normal Retirement Date is the lesser of 62/30 or 65/5 and if the participant has the 30 years, I think I would apply the reductions from age 62 since that is NRD. The unreduced benefit at 62/30 is not a subsidied early retirmenet benefit, but it is the Normal Retirement Benefit and therefore the X is entitled to it even if the participant doesn't take it. Does any agree/disagree?

I have never heard of a disability benefit that is payable as a lump sum. What would you do if he recovered, ask for the money back? I have no idea about your question. My only exposure is was with a plan termination. In that case the participant was offered an annuity (the annuity he was receiving) or the lump sum value of his acc ben commencing at NRD. The disability benefit is completely ancillary and can be taken away. I would think if it was not subject to 415 you would find a lot of "disabled" doctors.

Yes, the AP can elect to commence her benefits now since the participant is eligible for Early Retirement (55/10). What does the Plan say about what? The QDRO states that she can have an actuarially reduced benefit commencing on the earliest retirement date even though the participant isn't retired. My question is, when I apply the actuarial reductions, should they be applied from 62 or 65? Because the Plan states that Normal Retirement is at 62/30, and he has the 30, I think I should reduce from 62, but I was interested in other opinions. Typically the 62/30 is an Early Retirement benefit and therefore ignored unless the participant actually retires, but in this case, it is the Normal Retirement Date, so I think she get it, even if he doesn't take it.

Bill is age 58 w/ 30 years of service The Plan's Normal Retirement Date is defined as the earlier of age 62 w/ 30 YOS or 65 w/ 5YOS Bill's X would like to commence her benefits under the QDRO now, at Bill's age 58. In determining her benefit, would the reduction be from his age 62 or 65?

Are you sure the PA didn't receive it timely and just forgot or lost it? Heck, I can hardly remember what I reviewed last week let alone 7 years ago.

You NEED competent ERISA counsel. Don't try to do this stuff yourself or try to find some "off the shelf" document that you think might work. Although I am sure you are trying to be the most efficient for your client, I think you may be doing a disservice by letting the tail wag the dog. The sponsor should tell the attorney what they want so the plan can be drafted. If they choose to use a “vendor” as the attorney, you are stuck with whatever their plan contains (round peg/square hole). Also, you will be taking on the liability for document and its provisions. Since I assume you are not an attorney, good luck in court if something blows up! Tell the client that if they want to do this, they may need to pay a few extra $ up front to get it done right and hire an attorney who knows what they are doing. "Vendors" are just commodity driven, lowest price providers. Generally, not very good quality for anything that may be outside the simplest box.

I agree w/ PAX, not sure what the question is. You need to do what ever the QDRO says and if the QDRO doesn't say, maybe it isn't a QDRO. I've seen lots of results in lots of different QDROs.

They are "kinder gentler" if you correct mistakes when you find them. They have lots of programs for self-correction. The more chances you have to self-correct, the harsher they will be when the catch you.

The Plan Administrator always bears the ultimate responsibility for everything related to the Plan. That said, PA's generally don't file any form unless someone tells them to file it. I fail to see how why you think that just because you don't need to file a 5500 means that all the PA's advisors will ignore other requirements. You still need to do all the same work you did before, you just don't need to file the form anymore. If you have a deficiency, the PA needs to file the 5330 and pay the excise tax. This has nothing to do with the 5500.

What protection will filing the form provide? What makes you think the IRS will even record the receipt of an unnecessary filing? Has the IRS said what they would do with these unrequired forms? We seem to be ok with not filing the EZ if assets are less than 100K, why aren't you not willing to take the same approach if the assets are greater than 100K? Besides, its the PA's choice to file our not. I suppose you can prepare the forms and send them to the PA with a letter detailing both options, but I'm still not sure what advantages there are in filing when you don't need to. If the IRS isn't asking, why should I should be telling (at least as it relates to a 5500).

I am appalled that you would suggest that an actuary would do such a thing. I agree that it is ripe for abuse, but in order to accomplish what you suggest, you would need to back date the signatures on the Sch. Bs, which would be a clear violation of our Standards. Just because the Sch. B's are not going to be submitted, doesn't mean that I won't have a signed copy, with attachments, in my files. If the amounts are worthwhile for the IRS, there are lots of ways to determine if something was done timely and the fact that you don't need to actually file a Sch. B, won't provide any additional incentive for a "good" actuary to take that job from the TPA. Plenty of bad actuaries out there already who will sign anything if the price is right. P.S. The IRS got hammered pretty hard on this at the EA meetings, for just the reason you suggested. Maybe they realize they will need a revenue generator 5 years from now so they are setting up their ducks for a large scale audit program once they start seeing some abuse.

Its not the first year of the plan. How do the "first year" instructions help me?

Thank you Janet, but my question really had to do with Page 8 of the instruction booklet related specifically to multiemployer plans. It seems to imply that there is no room for an estimated premium. It seems to say that the total premium is due on the first filing date, which seems incredibly unreasonable. Since I'm sure many others have been dealing with this issue, I was wondering when/how other multiemployers are filings their PBGC premiums.

I agree with Andy, Holland said you need to re-file if a deficiency is involved, but if not, change CB on the next B and attach an explaination. He also very clearly stated once again, you CAN NOT change any assumptions from what was STATED on the B.

What is the due date for PBGC premiums for a multi-employer plan? We generally do prepare the filings for our multiemployers since they don't require an actuarial certification, but one of our clients asked us to prepare the premium forms. Page 8 of the instructions states that "For mulitemployer plans... the entire premium is due by the First Filing Due Date". Does that mean that there is no room for estimates using an ES-1? The plans generally don't have the census data for two months, are they expected to have a final participant count in 2 months? How do others handle this?

Full circle! I guess what goes around, comes around.

Conference of Consulting Actuaries

The few that we have filed, sometimes we get a phone call, sometimes not. Consider it "no news is good news". What kind of response were you expecting?

A return call from the Joint Board? They will call you back. I have had very good luck. You can also email them. I had to check on someone last year and they emailed me back the same day.

Just to add to that, since you can never change assumptions on an amended Sch. B, Jim Holland said that if the new actuary was amending the prior actuaries Sch B (because the prior refused to do it or was dead), the new actuary must use the prior actuaries assumptions. If the new actuary was not comfortable signing a schedule B based on the prior actuaries assumptions, an unsigned sch B c/b submitted with an attachment describing the situation. Maybe think of this as a large footnote to the sch B the new actuary will be signing - I said this, not Jim.

Yes, I believe that was what was being asked. I guess I wasn't expecting a "maybe". I always thought it was fairly clear. Problem was, it was the last question of the session and people were getting restless so there was no ability to follow-up.

FYI, Jim Holland said at the 2006 EA meeting that they sent 575 "Howdy" letters to 412(i) sponsors and they are currently examining about 200 cases. He didn't have anything else to report at this time since it is still ongoing.

There is a Rose Bowl joke here somewhere, but I just can't point my finger on it.

Just an FYI, the following question was raised at the "Dialogue with Treasury and IRS" session: If an employer contributes to a DB plan for participants who also have an account balance in a DC does the 25% limit come into play or do they actually need to receive an annual addition in the DC plan during the current year. Harlan Weller answered "that is a fairly messy topic and we have no answer at this time" I find his none answer very enlightening. I guess I will need to tread a little lighter with my advice to clients.