david rigby

We definitely won't see anything before it is signed. Jim Holland states that the IRS is keenly aware of the need for official guidance on the CL rates. For now, we should give them the benefit of the doubt; remember that PFEA was signed on a Saturday, and the IRS issued guidance on Monday. Pretty good.

Alternative: amend the plan to permit distribution to employees over 65 while still employed? (Asusming 65 is plan's NRA.)

Don't we all feel better knowing that the plaintiff attorneys got paid? I wonder what my next career will be?

I'm unsure the proposed amendment, as described above, would be OK, or whether it might be considered a 411(d)(6) violation. Even if a gray area, why would the sponsor want to be so harsh? What is the proposed freeze date? Will participants receive a "certified" benefit calculation? Will that calculation (certified or not) show the pre-hire assumed compensation? How much time will the participant have to respond to this? Practicality is useful here, as well as precedent. How much time/information is currently provided to a VT?

I'm surprised the plan does not have other language that covers those employed at the initial effective date of the plan.

July 31, 2006 MOODY'S DAILY LONG-TERM CORPORATE BOND YIELD AVERAGES Utilities Industrial Corporate Aaa NA* 5.79 5.79 Aa 6.08 5.95 6.02 A 6.29 6.27 6.28 Baa 6.52 6.82 6.67 Avg 6.30 6.21 6.26 MOODY'S DAILY TREASURY YIELD AVERAGES Short-Term (3-5 yrs): 4.89 Medium-Term (5-10 yrs): 4.94 Long-Term (10+ yrs): 5.14 MOODY'S DAILY PUBLIC UTILITY COMMON STOCK YIELD AVERAGES Price: 298.3 Yield: 3.56 New Dividend: 10.61

Maybe the participant made a mistake. Maybe not. Good advice from PIP and Bird. But this might also be an opportunity to review the "navigability" of the website.

Could be someone used the wrong EIN on one or more forms. Could be that an illegal, working for your client, used a phony SSN that just happened to belong to someone else, and that illegal later became a VT.

Very likely this is related to identity theft, or more precisely, the use of real SSNs by illegals.

Why bother doing the legwork for the participant? Assuming you represent the plan and/or the TPA, perhaps you could tell the participant that you will reviewing the draft, not providing the "how".

Anyone can get them because they are taken from the actual filings (remember that only the Schedules E and SSA are not public information). The DOL does not post such 5500 information. FreeERISA.com does the legwork to gather the data, and post it. If they post only two years information (usually), that is part of their business model. They may charge for older information, but it was available free sometime in the past, or you can go to the DOL and look it up.

This sounds like an opportunity for some good employee communication.

The FASB has stated their intention to issue a final standard "by September 2006." http://www.fasb.org/draft/ed_pension&p...ement_plans.pdf Likely, they are on course for that schedule.

I agree with PIP.

It probably won't matter: all plans will be frozen and PBO=ABO.

My understanding of 412©(8) is to give permission to recognize retroactive plan amendments for purposes of determing plan funding. Amendments that could (possibly) reduce benefits are given special language in 2 sentences in the flush paragrah, but that does not imply that the entire section is only for such amendments. I conclude that nothing in this section would prohibit the proposed amendment, or prohibit recognizing the amendment to determine the minimum contribution. However, there might be a separate BRF issue under 401(a)(4).

Duplicate posting http://benefitslink.com/boards/index.php?showtopic=32739

If the short PY ends 06/30/06, then the subsequent 6 months is the "overlap" period. DOL Reg. 2530.203-2©(1). "...the first vesting computation period established under such amendment..."

Blinky, do you agree that supporting the other position would be difficult, algebraically? For example, think about the perspective of determining an amortization payment, rather than the simple process of rolling forward the CB. Determine that payment with two different interest rates?

I thought you used both 12-month periods. One YOS for the 1/1/06 thru 12/31/06, and 1 YOS for 7/1/06 thru 6/30/07, assuming the minimum hours requirement has been met. For purposes of participation service and vesting service. Benefit service could be defined otherwise. Of course, the plan could be more generous than the ERISA minimum.

Gray Book 2006-6 Funding: End of Year Valuation Dates A calendar year plan has a valuation date that is the last day of the plan year. If the valuation interest assumption is changed for the 12/31/2005 valuation, what interest rate is used to roll forward the credit balance and amortization bases from 12/31/2004: the 2004 interest rate or the 2005 interest rate? RESPONSE The 2005 interest rate is used. The change in interest rate applies for the entire plan year. Copyright © 2006, 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. BTW, I agree with the IRS opinion here.

Try these prior discussions, for example: http://benefitslink.com/boards/index.php?showtopic=30896 http://benefitslink.com/boards/index.php?showtopic=29902 http://benefitslink.com/boards/index.php?showtopic=29464

I agree. Also see Gray Book 02-9 Funding: Quarterly Contributions and Application of Credit Balance Plan A has a calendar-year plan year. For 2001, Plan A makes the entire minimum contribution on December 31, 2001. The resulting credit balance on that date is exactly zero. For 2002, Plan A owes a quarterly contribution of $50,000 each quarter. Plan A makes the first two contributions of $50,000 each on April 15, 2002 and July 15, 2002. If these were classified as 2002 contributions (on the 2002 Schedule B), they would exactly satisfy the first two quarterly contribution requirements. However, suppose the actuary reports these two contributions on the 2001 Schedule B as 2001 plan year contributions. Plan A will now report a $100,000 credit balance as of December 31, 2001, which can be used to satisfy the first two quarterly contributions for 2002. In particular, under Q&A-12 of Notice 89-52, the credit balance and interest thereon can be used to satisfy subsequent quarterly contributions once the prior year contributions have been made to generate the credit balance. What is the next quarterly contribution amount due on October 15, 2002, assuming a valuation interest rate of 8%? RESPONSE $46,651. On April 15, 2002, per Notice 89-52, contributions for the prior plan year made by that date can be reflected in the credit balance. Therefore, on April 15, 2002, Plan A has a $50,000 credit balance, effective December 31, 2001. This credit balance is increased with interest to $51,135 on April 15, 2002, and $50,000 of it is used to satisfy the quarterly due. On July 15, 2002, another $50,000 worth of credit balance is created, effective December 31, 2001. This credit balance is increased with interest to $52,128 on July 15, 2002, and $50,000 is used to satisfy the quarterly due. The remaining credit balances of $1,135 on April 15, 2002 and $2,128 on July 15, 2002 are increased with interest to $3,349 on October 15, 2002. Therefore, Plan A must deposit only an additional $46,651 on October 15, 2002 to satisfy the next quarterly due. Copyright © 2002, 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.

Not in my house!

Maybe not. JohnG and PIP gave good advice w/r/t IRS Publication 590. You can see it here http://www.irs.gov/formspubs/lists/0,,id=97819,00.html or order your own copy by calling 1-800-TAX-FORM.