david rigby

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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.

Based on your phrase, "...for purposes of determining which Annuity Purchase Rate to use", it appears you are using some sort of table lookup. As Effen correctly points out (and as any actuary can tell you), a table lookup is a convenience. In these days of computer capability, it's probably not appropriate to use an old definition of "convenience". While most tables are built around mortality rates that change annually, any actuary can build a spreadsheet that will create a table using monthly rates (for example). In my opinion, using age nearest birthday fails the test of convenience (unless specified in the plan document). For example, I've seen "completed years and months" used as an interpolation basis. Others may prefer greater precision, such as years/months/days; my view is that method implies perfect knowledge of the exact payment date, which is often not the case. So choose an interpolation method that is reasonable. And be consistent.

Data as of 28-SEP-12 (Friday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 3.42 3.42 Aa 3.63 3.59 3.61 A 3.95 3.91 3.93 Baa 4.67 4.76 4.72 Avg 4.08 3.92 4.00 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 0.45 Medium-Term (5-10 yrs) 1.11 Long-Term (10+ yrs) 2.35

I think SoCal is on to something.

http://www.irs.gov/Retirement-Plans

There is no reference in the 5500 instructions to IRC 404. The SB is all about 412/430/436. It's difficult to see why the actuary would include a contribution on the SB that may draw attention to something that might be interpreted as a violation of IRC 4972. Can't you just take the "excess" and treat it as part of the next year's contribution? Notice that 4972 refers to "non-deductible". It does not say "non-deducted".

davsun, it appears you may be new to these Message Boards. Welcome. There is a Board whose focus is QDRO's, http://benefitslink.com/boards/index.php?showforum=89 Reviewing that Board will provide 100% support from the advice given by the other comments above.

Agreed. Ambiguity on this subject is unacceptable.

Yes, funding and plan termination are different. The MAP21 rates apply only to funding issues, and have no effect on 417e lump sum values.

Hope this is not a copyright violation. Here is the information from the link above:

Not to imply you can't read, it may be prudent to review the plan definition of compensation, just to make sure.

Perhaps it's just me, but the IRS comment about Title I seems to be pretty important, if you are trying to dot i's and cross t's. In the real world, it seems unlikely either agency will care about this point (they have much bigger fish to fry). Prudent advice to the plan sponsor will probably err on the conservative side.

"We"? "Know"? As above answers state, the plan can "know" only via DRO, and can act only via QDRO.

Caution. An owner-only plan is likely to have 100% immediate vesting. AtA's answer is correct, but what if the plan already has a vesting schedule more generous than the TH schedule? Then the TH vesting provision is automatically covered.