david rigby

Don't assume Congress won't make retroactive changes. Remember MPPAA (1980)? Even if there are retroactive changes, there may be "grandfathering", but sometimes that is defined based, not on the date of passage of the law, but the date a particular provision is added to the draft legislation. Possibly, the plan sponsor will want advice from competent ERISA counsel.

Gray Book 2002-14 Method Change: Automatic Approval for Plan in Effect for Fewer than Five Years Section 6.02(3) of Rev. Proc. 2000-40 denies automatic approval for any of the funding method changes listed in Section 3 of the Rev. Proc. if a change to the same aspect of the funding method occurred during any of the prior four plan years. May a plan that has been in effect for fewer than five years change funding methods pursuant to Section 3 of Rev. Proc. 2000-40? RESPONSE In general, yes. The initial adoption of a funding method upon the establishment of a plan does not count as a funding method change. However, if the plan is a continuation of another plan that was created as a result of a non-de minimis spin-off, you must consider the funding method history of the predecessor plan in determining whether or not the four-year rule is satisfied. A plan that is created as a result of a de minimis spin-off is considered a newly established plan. See section 3.03 of Rev. Proc. 2000-41. 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.

Often it is overkill to post long items such as these, since the original can easily be found with a link. In case readers are not aware, one of the many benefits (pun intended) of this website is the organization by topic. For example, 403(b) here: http://benefitslink.com/buzz/subjects/head.../403bplans.html

Correct, but the IRS presumes all terminations are involuntary unless proven otherwise. There are a signigicant number of prior discussion threads on partial terminations, which are recommended reading.

Hey Kirk! That hurts, coming from a lawyer.

Possibly the plan administrator is "holding" your husband's pension as an acknowledgement of a pending QDRO. This is not permanent but ususally gives the ex-wife some reasonable time to complete the QDRO process. This may be included in the plan administrator's written QDRO procedures.

Not sure about Andy's suggestion. Creating a transistion "as if it were circa 1987" seems like recreating a pension account for nearly 20 years. I doubt anyone wants to restate financial results for that. This sounds like a change of accounting policy, which is what the transistion is all about, so why not start the transistion now? Would the organization's auditor have the bigger vote here?

Presumably the ex-husband in the owner of the company, and the company is your client. A few thoughts: What documentation is in writing? Who cut the check? Who authorized a cash distribution w/o tax withholding? Why was the account in the ex-wife's name: due to a prior QDRO? was she also a plan participant? Is is a legitimate QDRO? Does the plan sponsor have an auditor? Assuming you are the TPA and/or recordkeeper, you may wish to discuss the situation with your ERISA counsel before proceeding.

Holy cow! Are you saying that the plan is frozen at the (intended) termination date of 06/30/06? I hope those are two separate provisions in the amendment, else you may have extended your benefit accrual. If this plan bases benefits on compensation, or elapsed time, then any freeze date beyond 06/30/06 can accrue more liability.

In general, ERISA definitions of vesting and vesting service focus on the employment relationship, not the plan relationship. I believe vesting service cannot be frozen.

Voting has nothing to do with this. See ERISA sec. 202, DOL reg. 2530.202.

Comments from Q and Tom are good. But two points: - you don't have to receive the SPD just because you were employed, but must receive it when you become a participant, which is based on the terms of the plan; - Tom's answer is an attempt to explain how a defined contribution (DC) plan works, but it has not been established that this is a DC plan. Check the SPD. (There might be 2 plans, not one, in which case there should be 2 SPDs.)

Not at all. I'm saying the problem (if there is one) can only get worse. Don't let it.

I tend to use "experience", especially in the context of "experience gain/loss". I never use "actuarial gain/loss".

Is someone waiting for an answer? Give the notice to the VTs!

I think this is a plot by Tom to distract us, so we won't pay attention to our clients, and he can steal them.

I agree with Andy.

Perhaps I do not understand the Q. R U stating that the 5500, including Schedule H, was filed for 2004 without an audit report? How was line 3 of the Schedule H completed?

If "firms" means financial institutions, BB&T will establish automatic rollovers. Whether from a DC or DB plan is not relevant. Email me and I can provide some details.

For plan years beginning in 04 and 05, the rate for 404 unfunded CL has a separate range from the rate for the 412 UCL. They can be chosen independently, as documented in previous discussion threads, anywhere within the applicable range for each. If you have not filed the Schedule B, you have not "chosen" the rate. However, the Schedule B has nothing to do with IRC 404; revise your 404 CL if necessary, document your files and your communication to the plan sponsor.

Here's a thought. Talk to the plan sponsor! Perhaps the sponsor is not aware it may be (is?) in violation of anything, and would appreciate the information.

May 31, 2006 MOODY'S DAILY LONG-TERM CORPORATE BOND YIELD AVERAGES Utilities Industrial Corporate Aaa NA* 5.95 5.95 Aa 6.21 6.11 6.16 A 6.43 6.39 6.41 Baa 6.62 6.94 6.78 Avg 6.42 6.35 6.39 MOODY'S DAILY TREASURY YIELD AVERAGES Short-Term (3-5 yrs): 5.00 Medium-Term (5-10 yrs): 5.09 Long-Term (10+ yrs): 5.32 MOODY'S DAILY PUBLIC UTILITY COMMON STOCK YIELD AVERAGES Price: 278.4 Yield: 3.79 New Dividend: 10.56

Theoretically, every buy/sell agreement is unique, but normally, a stock purchase means the sponsoring company will have a new parent company. It does not automatically change the sponsor, but it would alter the controlled group. Thus, there is no requirement to terminate, unless the parties have agreed to it beforehand. And there is no requirement to fully distribute; since making full distributions may take some time, such provision may delay the actual sale by an unknown time. Numerous other alternatives exist, such as a spinoff immediately before the sale, and probably many others that would require legal advice. Oh, they all require that!

And make sure you get the proper legal advice on how to accomplish this.

... and don't assume (here or otherwise) that actuary = TPA. BTW, does the service agreement between the TPA and the plan administrator address this possibility?