david rigby

Yes, I've found the reg. Perhaps my phrasing is flawed. What I meant is that the asset adjustment developed in the reg does not have a corresponding Code reference. Or does it?

Generally, the two most recent 5500's will be available free. You can get more, for a fee.

Nothing in Gray Book. IMHO, not sure the cited code section will be a problem. I can't find a cite in IRC 404 that corresponds to the 404 reg you cited; have I missed it? If no such cross reference, the adjustment to assets appears to be a regulatory creation. Is it reasonable to assume the IRS will make similar adjustment under the new 430/404 structure? But I'm willing to be educated about other perspectives.

Yep. Page 17 of the 08/31/07 Proposed Reg. http://edocket.access.gpo.gov/2007/pdf/07-4262.pdf 1.430(f)-1(f).

No lawyer I, but it seems this is, at least for now, a plan issue, not an estate issue. Please make sure your attorney is intimately familiar (not casually familiar) with QDRO's. JSimmons and mjb have provided good advice. The DOL has some "reading material" here: http://www.dol.gov/ebsa/Publications/qdros.html

To elaborate on Effen's answer, the "collective bargaining" exclusion applies to where pension benefits are the subject of good-faith bargaining. Not exactly the same as "union". See IRC 410(b) and regs.

Good advice. But beware, some (large) companies may outsource this function to an outside vendor.

Probably not reasonable to expect a waiver of excise taxes.

IRS guidance is likely, and needed. IMHO, it would be reasonable, at least in the meantime, to look to Rev.Proc. 2000-40 for expected smoothing structure; just can't go to five years anymore.

...also as permitted by the document (as mentioned by BG).

Net effect, a built-in experience loss? But wouldn't the 404 maximum (usually) permit the ER to make sufficient contribution to keep him 100% funded?

Dunking was banned, circa 1966? (think Lew Alcindor), then reinstated (I have no idea when). In college, freshmen were not permitted on the varsity team (timing?) but were permitted beginning in (1974?).

Yes, that's the part about "not relevant". I just want to point out that a partial termination could be relevant if some of the 15 layoffs are not vested.

Although not relevant to the question of "frozen", this plan may have experienced a partial termination.

The Gray Book is a creation of the Enrolled Actuaries Meeting. - Each year, a few months prior to the meeting, questions are gathered and presented to IRS actuaries and attorneys. Generally, these questions focus on situations that are ambiguous (at least to the questioner). - The IRS responds, verbally never in writing, and the answers are paraphrased by an EA committee. These Q&A's are assembled, printed, and distributed to those who attend the EA meeting each spring. It’s been issued every year since 1990, and is called “Gray Book” merely because the cover page is gray stock. I spell it "gray", but some people use "grey". As far as I know, no edition is in the public domain. The recent editions carry a copyright notice like this: Copyright © 2008, Enrolled Actuaries Meeting All rights reserved by Enrolled Actuaries Meeting. Permission is granted to print or otherwise reproduce a limited number of copies of the material on the diskette for personal, internal, classroom, or other instructional use, on the condition that the foregoing copyright notice is used so as to give reasonable notice of the copyright of the Enrolled Actuaries Meeting. This consent for free limited copying without prior consent of the Enrolled Actuaries Meeting does not extend to making copies for general distribution, for advertising or promotional purposes, for inclusion in new collective works, or for sale or resale. Most of the recent editions also include this important footnote on every page: The above response is a summary, prepared by representatives of the Program Committee, of the oral responses to the question posed to certain staff members of the Treasury and IRS, which represent only personal views of the individuals who provided them. Accordingly, the response does not necessarily represent the positions of the Treasury or the IRS and cannot be relied upon by any taxpayer for any purpose.

Hmmm. When you value the funding target at next valdate, how do you calculate the PV of this retiree? The prescribed mortality table and interest rates differ for funding compared to LS. Or is that significant? Would your plan provision have to state that the 80% trigger is after the payment of LS?

Not so fast. Read IRC 4980©(1)(A) carefully. The sponsor must have been, at all times, exempt from taxation under Title A. That is not exactly the same as "I'm a non-profit." It's my understanding that the IRS is very strict on this point. For example, from the 1999 Gray Book: Of course, the sponsor will want an opinion from legal counsel.

I go back to first principles. Use assumptions that are reasonable, and apply to the particular population. If that means a select and ultimate salary scale, so be it. I don't think it makes sense to use one scale for TNC and an entirely different scale for the cushion (and I doubt the IRS would approve). Also, there is nothing wrong with using a 1% scale for plan X becuase it is in a depressed industry, but 5% for another sponsor. When setting salary scales, I don't have to apply "national inflation" if it does not affect the plan sponsor at the same time, or same rate, as the national average. But I'm interested in other opinions also.

GMK's suggestions seem very logical. But it may be prudent to get legal counsel involved first. (Presumably, that is the PA's counsel, not necessarily the plan's counsel.) (Hmmm. Would legal fee be a settlor expense?)

Is Fuiro related to Guido?

Yeah, is there a bond (of significance), without regard to whether it's required?

Does bonding play any role?

See page 6 of the instructions: http://www.dol.gov/ebsa/pdf/2007-5500inst.pdf

Thanks for the background, Don. IMHO, this is more proof that the PBGC's existence (as well as stucture) is counterproductive to its (alleged) purpose.

Would it be easier (and perhaps "cleaner") if you deal with this in the defnition in the plan?