david rigby

Hurricane Sandy caused havoc with regular reporting of rates around the end of October. The kind folks at Moody's have given me the following summary for several days. Note that the bond market was closed on 10/30, so there is no entry for that date. 11/2/2012 11/1/2012 10/31/2012 10/29/2012 10/26/2012 Avg. Corporate 3.94 3.92 3.87 3.90 3.95 Aaa 3.47 3.45 3.40 3.44 3.48 Aa 3.61 3.59 3.54 3.57 3.61 A 3.89 3.86 3.81 3.84 3.89 Baa 4.52 4.50 4.45 4.49 4.54 Avg. Industrial 3.87 3.85 3.80 3.83 3.88 Aaa 3.47 3.45 3.40 3.44 3.48 Aa 3.54 3.52 3.47 3.50 3.54 A 3.89 3.85 3.81 3.84 3.89 Baa 4.58 4.56 4.51 4.54 4.59 Avg. Public Utility 4.00 3.98 3.93 3.97 4.02 Aaa Aa 3.67 3.65 3.60 3.64 3.68 A 3.88 3.86 3.81 3.84 3.88 Baa 4.45 4.43 4.39 4.43 4.49

Required by whom? - IRS? No. - DOL? No. - Local or state government statute? For you to verify. - Local or state government policy? For you to verify.

It's not clear what this means. An excellent question. Your first source of information should be your attorney.

Did the non-profit have legal counsel? If so, he/she/firm might be willing to assist. If not, perhaps look for some pro bono legal advice?

An interesting ethical question. Perhaps your question should be part of your class.

While the consequences are most significant when discussing the cost of an audit, there may be other issues. For example, there are at least two uses of "500 participants" that affect DB plans.

Right jpod. Of course, the (well-informed) sponsor would not purchase any annuity contract with that condition.

Holy Avogadro, Batman!

Andy is quoting the Q&A from IRS Notice 2012-61, which you can read here: http://benefitslink.com/src/irs/notice-12-61.pdf

Yes and No, in that order. How would a sponsor (who may now be out of business) "monitor" an insurance company anyway?

That's my understanding. Sloppy?

You can search these Message Boards and find several prior discussions on this topic. IMHO, it's a good thing to offer state tax withholding, but those who administer very small plans may disagree. (If it's a large trustee/bank who writes the check, the inclusion of state withholding should be a no-brainer.)

Deer can read, can't they?

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There is no requirement to use any mortality table and/or interest rate. Some plans use a table of conversion factors, usually expressed as a percentage. But......it must be defined in the plan document.

Link to SS news release http://ssa.gov/pressoffice/pr/2013cola-pr.html

Sometimes its amusing to see who is giving orders and who is following them.

Or does the plan already have language that addresses this situation?

1. <let the attorneys respond. Better yet, let your attorney respond.> 2. IMHO, a suspension provision (assuming you refer to the rehire of a retiree who is receiving a monthly benefit) is a bad idea, whether for an early retiree or a normal retiree. It is very difficult to correctly administer a suspension provision, especially for a plan sponsor with multiple locations. - Suspension language in the plan can discourage an employee from accepting re-employment, even part-time. If the re-employment was requested by the employer (which does happen), this means the plan is interfering with the Employer’s HR policies. - If the plan is frozen, a rehire cannot generate additional accruals. - If the plan uses 1000-hour-rule and the rehired EE works less than 1000 hours, there is no additional service and no change in the benefit. This result makes the most sense to both employees and employers. Obviously, there is no “double-dip”, and suspension of the monthly benefit is undesirable. - Even an employee rehired part-time might work significant hours in a single month or quarter but never reach 1000 hours in a year. For example, imagine a bank that hires retired tellers during the summer months to fill in for others that go on vacation, and that person might have 500 hours in 3 months, but nothing else during the year. Obviously, there is no “double-dip”, and suspension of the monthly benefit is undesirable. - If the rehired EE works 1000+ hours, the additional year(s) of service will cause a recalculation of the benefit at subsequent retirement. The increase in benefit, if any, is offset by the value of the benefits already received (at least in most plans). Many rehired retirees work part-time; very few will work full time. Even when there is additional service accrual, the overwhelming majority result in a zero change because the additional year(s) are “less valuable” than the benefits already received. - If the pay after rehire is significantly more than the pay before retirement, it is possible for the additional year(s) to create a net increase. In this context, “significant” probably means pay at least 25% higher; such higher pay after rehire is extremely rare. - If the employee is over Normal Retirement Age, the avoidance of a suspension provision is even more important, as it can avoid the cumbersome (and expensive) process of calculating and providing the post-NRA actuarial increase. In my experience, there are no winners in the administration of suspension language, and the complexity can be significantly cumbersome. There may be other opinions.

You can always go to http://benefitslink.com/boards/index.php then (upper right), click View New Posts

comes up empty if there are no postings in the last 24 hours.

Under the Unit Credit funding method (PPA), do we care how long is the plan year? Or just how much benefit is accruing during the PY?

Accountant? Hmmm. Assuming this refers to a plan audit, can the plan reduce the number of participants below 100 before 2013?

What is the accrued benefit on 12/31/2012? What is the accrued benefit on 10/01/2012 (zero)? Seems to me that you use basic actuarial principles: TNC is the value of the increase in the accrued benefit (w/ proper discounting to BOY).

Like.