david rigby

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.

It's pretty common. The plan can no longer pay monthly benefits, so it has to either pay lump sums or but an annuity.

The plan's termination provisions may have an alternative payment form (lump sum) that applies. If not, then the plan has to find some other way of completing the termination. What does the plan say in that case?

Is this a QJSA?

Some collective bargaining agreements state that the union "will be provided" with a copy upon completion of the filing.

New or old, having govt. tell you how to invest is a bad idea.

I think SoCal is correct about reference to Jordan, beginning on page 191 of the Second Edition (1975). Certainly one of the greatest books ever published. Andy is correct that the "pop-up option" is not discussed in Jordan, but it was discussed in my class, led by one of the greatest actuarial educators ever.

In 30+ years, I've never seen that benefit in a qualified plan. It may be more common in govt. plans. Other than that, my suggestion is that the participant may wish to spend an hour with an experienced ERISA attorney.

Maybe not. For EE over NRA, perhaps the plan's termination automatically defines the BCD. Read carefully.

Yes, the benefits s/b calculated at the BCD; the plan termination date is relevant because that is the absolute last date of any benefit accrual, unless the plan was amended to freeze accruals earlier. And, Effen is correct in his comment about actuarial increase. The exception might be if the EE had actually commenced payment at NRD (or some later date).

There are some prior discussion threads on this topic, such as: http://benefitslink.com/boards/index.php?showtopic=38044 http://benefitslink.com/boards/index.php?showtopic=34709 http://benefitslink.com/boards/index.php?showtopic=33878

Good find Blinky! Also, this: http://benefitslink.com/boards/index.php?showtopic=20619