david rigby

You can resign, but you cannot fire a client. Follow your written agreement. Try the Search feature for a few prior similar discussion threads.

TGIF

1. Sieve, doesn't the answer depend on whether A was merged into B, or B merged into A? 2. If the surviving plan does not have a loan provision, could it be amended to "retain" only those loans existing at the date of merger, thus avoiding the future loan problem?

How about a plan amendment? Assuming there is an amendment, it should state "... no new participants after xx/xx/xx..."

IMHO, auditors are usually happy to see a well-defined technique. As long as the technique is valid, then the resulting rate is valid. Use of one technique should not preclude you from fine-tuning that technique in later years. A rate is not "working well" based on how close the assets and liabilities are. The discount rate is determined without regard to the assets.

It's good to see correct technical terms in use. IMHO, yes you do have a problem. Not that you have to divulge the details here, but saying "we don't have the data" is much easier than actually searching for the data. Has that avenue been explored? While your proposal may be a reasonable suggestion around a problem, it's probably important to address the problem first, and document how you've attacked that problem. On the other hand, if you've addressed it, with no success, could you accomplish your goal thru an IRS DL? Just thoughts.

Just my opinion, but anyone who can use this phrase probably doesn't have to worry about the original question.

... or do you reject the DRO as not meeting the requirements of a QDRO?

Failure to follow plan document? disqualification?

Good discussion from Andy and SoCal. Here's a few more: - Upon solving for the "equivalent rate", do you round the result? I suggest rounding is permissible, but be careful about rounding too much, lest you lose the credibility of your technique. - The IRS yield curve goes to 100 years. Since there aren't any such long-term bonds, the IRS has created a technique for extrapolating such rates. Some observers are skeptical (although rates beyond 50 years are usually not a significant portion of the total liability). - The Citigroup yield curve stops at 30 years. Your plan may have a reasonable portion of its liability after that point, so think carefully about how to address that. - The Citigroup yield curve comes with its own average rate each month, described as the equivalent rate for a "typical" plan. I have searched without success for their description of such plan. Be careful about assuming that one rate is valid for every plan. It's not clear (to me, at least) that the original poster is an actuary. If not, I suggest engaging an actuary with appropriate FAS87/158 experience.

Is this one question or two?

I don't know if there is "general consensus". Here are a few prior discussions for your reading: http://benefitslink.com/boards/index.php?showtopic=43817 http://benefitslink.com/boards/index.php?showtopic=42855 http://benefitslink.com/boards/index.php?showtopic=42266

From Relius: http://www.relius.net/News/TechnicalUpdates.aspx?ID=496

Notwithstanding Andy's excellent question, who cares what the Bank's counsel says? The Plan's appeal procedure will be outlined in the Summary Plan Description.

Data as of 29-JAN-10 (Friday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 5.24 5.24 Aa 5.55 5.45 5.50 A 5.73 5.69 5.71 Baa 6.09 6.30 6.20 Avg 5.79 5.67 5.73 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 0.64 Medium-Term (5-10 yrs) 2.35 Long-Term (10+ yrs) 4.05

Amen!

Well ... other than "hire an actuary" ... - One way to do it is to "roll it forward" from one measurement date to the next: adding/subtracting the new components, such as amortization, g/l from assets during the past year, g/l from change of census data and/or change of actuarial assumptions during the last year. However, this technique usually serves as a "double-check" on the derivation. - Another way to do this is to maintain the "pre-FAS158" Accrued/Prepaid Pension Cost. That will serve as part of an "equation of balance" to help you derive, or check, the g/l. Remember, change of g/l comes from only three sources: change of assets, change of liability, or amortization. But, perhaps we are back to my first statement. Please feel free to act on that.

The PVAB and FT are based on the actuarial assumptions. Is it reasonable to assume (without regard to the plan's definition of NRA) that one or more participants will retire prior to NRA?

Do you really need that? The most common method of dealing with this issue/problem is to amend the NRA to 62, and simultaneously add a subidized early retirement.

Agreed. w/r/t second question, if the contribution is expected after 12/31/2010, then the weighting is zero.

Austin, I think the advice from Kevin in Post 2 is dead on, except you should also refer to the other parts of that reg, such as Q&A20 and Q&A25.

Shouldn't a CPA should know how to research that question, rather than have you do the legwork?

Sieve, any comments on J Simmons' suggestion?

Perhaps. The alternative, doing nothing, seems counter to the goal of covering the compensation. Although I haven't reviewed the preamble, it seems likely that this situation is a perfect example of what the IRS was trying to accomplish with the "end of plan year" provision.

No disagreement with conclusions, but there may be more to it. I think the 415 reg requires the plan to state what is included in compensation. Is the payment of these $ amounts as W-2 sufficient for that purpose? This is my brief overview of relevant points from 1.415 reg. Valid? • In general, “severance from employment” is considered a single event or date, and is not gradual or phased in. • Certain types of compensation paid after an employee’s severance date can be included in a qualified plan’s definition of compensation, if paid within a specific limited time period. • Certain other types of compensation paid after an employee’s severance date cannot be included in a qualified plan’s definition of compensation, even if paid during the limited time period applicable above. • In order to include available amounts under the plan’s definition of compensation, the plan provision must state such inclusion, and the application of this definition must be non-discriminatory. If the plan provision is silent, then all compensation paid after a severance date is excluded.