david rigby

Data as of 30-NOV-11 (Wednesday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 4.07 4.07 Aa 4.04 4.29 4.17 A 4.38 4.64 4.51 Baa 5.07 5.57 5.32 Avg 4.50 4.64 4.57 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 0.60 Medium-Term (5-10 yrs) 1.49 Long-Term (10+ yrs) 2.65

Assuming you are referring to the 120-participant trigger for audit, most practitioners will keep the sponsor advised every year how close the participant count is to 120, and what action (if anything) the sponsor can do to keep it down. If you chose not to do this, you will quickly see how angry your client can get.

There is another angle: does someone get a commission on the borrowed money? If so, there is an incentive to encourage borrowing.

Andy is correct. Someone has already spent significantly more than $400 chasing this refund.

Correct. The purpose of SSA is to record a deferred benefit. A benefit that goes into pay-status is included on the SSA with a delete code only if it was previously included with an add code.

You know, if you leave those plan assets invested in the market, maybe the excess will take care of itself soon.

It's very common for SS disability to take a long time, sometimes with retroactive effective date. Most PP that provide a disability benefit recognize this, and accept a retroactive effective date of disability. The important thing is (usually) whether the effective date of disability falls within the employee's employment period. It's possible your plan does not need to be amended to recognize this. Review any precedence.

Don't overthink it. See comment above about "horse trading".

Non-attorney comment: this implies you think the PA must get all monies out of that fund. I think that's overly demanding (some might use the term "controlling"). Suppose the ER says to the participants, "Fund X has not performed well, so we've added Fund Y and frozen X. If you want to move your current fund X allocation, you may do so."

J&S? Lump sum? Permitted by plan? Assuming you get by that, the LS is (probably) the present value of all future payments.

You laughed. Is that billable?

The IRS will presume the termination is involuntary, possibly leading to a partial termination, but the sponsor has the ability to refute that presumption.

Look in the 410 regs. I think it's the end of the plan year following the plan year in which the merger occurs.

I'm not sure either, but recall a similar prior discussion somewhere on these Message Boards. Try the Search feature.

There may be another view. Perhaps the TPA can "gently" enlist the assistance of the sponsor's attorney and/or accountant. Some plan sponsors pay more attention to the message depending on who is speaking. The result might be better (for the participants) than just walking away. Of course, the TPA should insist on a mechanism that will get its fees paid as well.

Couldn't you pay it as a discretionary amount in Buyer plan?

AtA is definitely on the right track. There may be more than one valid approach. In my experience, if FAS88 is involved, it's time to discuss with the auditor, since the date of recognition might be flexible. If the auditor wants to recognize the FAS88 event at BOY, I suggest you do it first, and then determine the expense for the rest of the year (ie, you have already subtracted that retiree from both assets and liabilities). A prudent alternative might also consider whether more lump sums are expected during the year, so that the auditor gets to decide whether they should be combined into one FAS88 event. Just from a viewpoint of practicality. The retirement assumption at BOY vs. EOY is intriguing. Might be a reasonable time to ask if the BOY assumption is valid.

Data as of 31-OCT-11 (Monday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 3.88 3.88 Aa 4.01 4.03 4.02 A 4.42 4.43 4.43 Baa 5.08 5.29 5.19 Avg 4.50 4.41 4.46 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 0.68 Medium-Term (5-10 yrs) 1.61 Long-Term (10+ yrs) 2.81

Past tense? Isn't the Target now a subsidiary of Buyer? Who thinks that Target gets to make this decision?

Hmmm. Often (but not always) the word "commissioners" is short hand for "Commissioner's Standard Ordinary" (but you already knew that), and refers to a table used for life insurance reserving. IMHO, it is not appropriate to use that type of table to measure pension liability. However, there may be other tables that use the word "commissioners". http://mort.soa.org/ The Society of Actuaries maintains a great database of tables. I could not find a 1990 table with "CSO" or "commissioners" or "CM" or "charitable" in the name.

Don't overlook the possibility that some participants are non-responsive because they are deceased.

Seems like the PA might be confusing some different things: (1) if the PA thinks the retiree might be deceased, then investigate that possibility. (2) if the PA thinks the retiree's address is incorrect (certainly relevant since a 1099R must be mailed), then investigate that. This possibility probably does not include stopping the payment. BTW, if the bank thinks the retiree is deceased, it might not accept the direct payment, which would trigger the PA to investigate (1). Why not ask the bank if they have the address or will encourage the retiree to call the PA? Don't make a federal case out of this, just a little common sense.

Ditto.

"substantial" is in the eye of the beholder. AtA's advice is spot on, but don't assume the contribution is "too high". Rather, find out what the doc can afford, and we're probably assuming the plan is ongoing for at least 5 years, and then design the plan benefit to fit within the doc's ability to pay. The actuary will know how to do this.

Agree. I think there is a Gray Book Q&A on this issue. As best I can recall, it opines that FT or CL is a valid basis for the test.