ak2ary

That is correct. So under 2008-21 you have two choices for determining the 2007 AFTAP for the 2008 presumptions applicable from April 1 to Octobr1, 2008. You can use the adjusted 12/31/06 FCLP or you can use the 12/31/07 FCLP, apparently...but you have no guidance for the 2008 AFTAP which you cant calc til after 12/31/08...which means that on 10/1, since no 2008 certification, plan freezes etc...

AFTAP has to be done as of the val date So you can use the 2007 12/31 AFTAP (minus 10% after 4/1)for presumptions for 2008 until 10/31/2008...then you're frozen until the 12/31/08 val is done (unless we get some relief)

For a new plan, assuming that you are over 90% funded at 12/31/07, I see no reason to switch to BOY until we get guidance on EOY vals for 2008 and later. Obviously for the over 100 life plan you should do both

Unlike a single employer plan, the funding in Multis is not necessarily on a basis that is actuarially sound. That is , the PV future contributions plus the assets may be less than the present value future benefits. The first clue is that the contribution is not sufficient to cover the NC plus interest on the unfunded, thother, more common clue is that the credit balance is being drawn down to meet minimum funding. If the credit balance in a multi is declining, judgement day is just around the corner. In cases where the credit balance is being drawn down, projections are common to estimate how long the credi balance will last until a funding deficiency arises, at which time contributions have eto rise or benefits have to shrink or both. We provide projected valuations to all odf our multi's and credit balance maintenace is crucial in these projection. Normally we provide a deterministic modeler in eXcel, so that the trustees can model the impact of different rates of return, different benefit multipliers, different contribution rates etc. Of course only a few years ago, these projections were very very expensive Happy- I dont know of any literature, but I will ask the folks in our multi unit and if they have aything, I'll give it to you in DC

Plan A is a DB plan that covers some of the HCEs at a law firm Plan B is a DB plan that covers some of the NHCEs at a law firm Plan B's sole reason for being is to be aggregated with plan A to allow plan A to meet 410(b) and 401(a)(4) Plan A is 100% funded with respect to its AFTAP Plan B is 65% funded with respect to its AFTAP Both plans offer lump sums, but in 2008 plan B is precluded from payong them due to 436 restrictions. Does this raise an effective availability issue since Plan A, the plan covering only HCEs can continue to pay lump sums and plan B the plan covering NHCEs cannot? I suspect it does

I agree, there is no relief for those plans and the only real options are doing the 12/31/07 val quickly or switching to BOY. Of course, on new plans, the only restriction is on accelerated payments....

They are inconsistent in their 401(a)(17) answer. Technically it seems that 401(a)(17) increases get funded in the Target Normal Cost not in the funding target and since they don't increase the funding target they can go into effect

The IRS ahas been made aware that their are circumstances in which a plan could be less than 80% funded and still terminate perfectly legally... Plan not covered by PBGC which does a 4044 allocation (or modified 4044 allocation), PBGC covered plan with substantial owner waivers etc. They realize that they have to do something, but as of right now, my impression is that it is so far down the list its not even funny. My guess is the earliest we would see anything is in the final 436 regs and that will only happen if IRS determines that it has the authority to waive the application of 436 under certain circumstances. Otherwise, it will be wait and see for tech corrections . In the meantime, starting 4/1/08, 436 applies to all DB plans......... no certification = no payout .........I'd be real hesitant to ignore it

Further if the participant is not eligible to defer from any paycheck received after termination of employment, it appears that 414(s) could apply since it allows you to exclude pay while not eligible to participate.

Cash balance plans were among the prime targets for the changes to the NRA rules. There is no provision for their's to earlier than a traditional plan. If its a one person plan and the only participant wants to get paid, why wouldnt you terminate the plan?

Jays point is well taken, but assuming no such penalties, you seem to be ok for a few years, but you have to certify in the year of, or the year before, termination cuz, absent technical correction, a terminated plan is subject to the bft restrictions and, absent a certififcation, cannot payout or purchase an annuity

Thanks Jim may also have input on this when we do the written answers to session questions

I asked about the applicable month when doing EOY vals. Thanks. Apparently this computer does not have Powerpoint installed so I cannot get to slide 48. But the difference between beginning and end of year vals in choosing the segmented yield curve set to use is that the rates have to be for the month containing the val date or any of the 4 prior months,. The slide points out, however, in theory the segment you use is based on the time from the benefit payment to the first day of the plan year. So in theory a payment to be made 19 years and 2 days from the val date in an end of year val would be made more than 20 years from the first day of the plan year and use the 3rd segment rate for discounting. I hoped that Jim would confirm that either this wasnt the case or that EOY guidance for 2008 would eventually fix this. He didnt confirm either, but I hope eventual guidance will confirm that it is time from the val date not time from BOY that determines whether to use the first second or third segment

Of course. how do I know you don't have three eyes This could be completely politically incorrect

I was talking to you as if you really had three eyes...I know how you feel

if I knew he was gonna answer that way...I wouldnt have asked it You asked a question we didnt get to, but I dont remember what it was

All the questions asked will be accumulated and answered on ASPPA website. Tangibility is another story

He didnt like my idea

What'd he say?

Of course notice 2008-21 says at the end that the IRS is considering similar guidance for later years for EOY vals. Since the IRS is considering it, does that make it reasonable?

Let me take back oh say maybe 95% of everything I said in this thread. After a closer reading of 2007-67, and chasing down the references therein, I now believe that it does provide that you may retroactively remove GATT rates up until the end of the remedial amendment period all the way back to the first 2008 ASD, without jeopardizing the plan's qualified status. You may not change lookback months or stability periods without providing the one year greater of period You still run the risk of losing participant suits in court So while amending in advance may be a best practice, you are probably ok to just take out GATT interest and Mortality and put in PPA interest and mortality operationally

...of course not removing GATT rates may cause most valuable issues etc...

Administrative practice is not a plan provision...you an generally have an administrative practice that brings the plan into compliiance with the law and amend later, even if that increase participant benefits...you cannot have an administrative practice that decreases plan benefits below those contained in the document however For most 2008 lump sums amending to PPA rates isnt necessary, its optional. You can simply pay the benefit contained in the plan doc and since the plan doc provides GATT the lump sum you pay will (in most cases) exceed the minimum required under 417e. The amendment is only necessary when you want to eliminate the GATT Rate Since the removing GATT rates part of amendment is optional , you have to adopt it to make it effective..........

wow its even more fun to say zimbo when its not capitalized...thanks guys!