david rigby

If you want to hold down the cost, then why not merely exclude employees with one year of service? (This also can save some PBGC premiums, assuming the sponsor is covered.) The purpose of the funding method (and assumptions) is not to manipulate the cost. If the cost is "too high", then the benefit promised by the Plan is "too high".

That must really hurt, coming from a fish.

DOL: http://www.dol.gov/ebsa/ Search for the term "settlor expense"

I don't disagree with Blinky's suggestion to use only the rate in effect at the end point, but alternatives may be reasonable. In this case, determining the 7/1/05 AE value by using 6 monthly rates might be a reasonable interpretation, but not a practical one. This may be an opportunity to develop a new administrative practice (and put it in writing).

Right. And upon further reflection, I suggest it is not a reasonable funding method if it recognizes such demographic changes after the valuation date. Since this is 2003, you have already filed the Schedule B, so changing the valuation date will not be possible. I wonder what is really going on here: is someone trying to "manipulate" the cost by ignoring plan participants who will not vest? If so, why not do the same thing with the turnover assumption?

Hold on. In my profession, it is well-established that all clients should have a DB plan.

Seems inconsistent to me. For example, were all 2003 terms excluded, or only non-vested ones? What about someone who terminated on 12/31/03? - If you are ignoring all terms, that sounds to me like an EOY valuation date. - If you are ignoring only non-vested terms, that sounds like an assumption, which may be reasonable, but should be evaluated on that basis. BTW, there are circumstances where a valuation may use a 100% turnover decrement in year one, and this can be considered reasonable.

This prior discussion indicates the use of W-2, but a review of the instructions would tell you if any procedures have since changed (not likely, but such review never hurts). http://benefitslink.com/boards/index.php?showtopic=15273

That link has been included in several prior posts, but it is not necessarily updated as soon as possible. It also shows only one month-end rate.

Just in case you had not noticed, on June 6, 2005, the Moody's Aa rates dropped below 5%: MOODY'S DAILY LONG-TERM CORPORATE BOND YIELD AVERAGES Utilities Industrial Corporate Aaa NA* 4.92 4.92 Aa 4.99 4.95 4.97 A 5.35 5.21 5.28 Baa 5.63 5.93 5.78 Avg 5.32 5.25 5.29 MOODY'S DAILY TREASURY YIELD AVERAGES Short-Term (3-5 yrs): 3.64 Medium-Term (5-10 yrs): 3.83 Long-Term (10+ yrs): 4.25 MOODY'S DAILY PUBLIC UTILITY COMMON STOCK YIELD AVERAGES Price: 270.1 Yield: 3.74 New Dividend: 10.10

Possible that this discussion (noting the difference between coverage and discrimination) will be helpful. http://benefitslink.com/boards/index.php?showtopic=28805

Slow down a bit. Just because the employer "wants to terminate the plan" does not give anyone 100% vesting. (Agreed, it may not be relevant to the original question.) But why did the ER make any contribution to the plan for an employee who was not a participant? Was it deducted? Perhaps IRC 404 was violated? "...can the $3200 be refunded to the employer?" Be very careful about this. What does the plan say?

Read, re-read, and ponder well mbozek's response. But more generically, what part of "insider information" is unclear? If you asked this question of the SEC, what answer would you expect?

Where did the money go? - Actual check? Who cashed/deposited it? That is who the Plan should make request of. - Direct deposit? Who else has access to the account? You get the idea.

Another option might be for the former spouse to inquire (of her attorney) why the DRO was never qualified (or even attempted) as a QDRO. Possible mal-practice against the attorney? This inaction is not the fault of the plan or the second spouse.

The goal is accomplished by selection of a retroactive effective date for the plan amendment. Theoretically, there could be a concern under the 401(a)(4) regs.

Nothing wrong with this technique. It may be because the HCE (ususally only one) is already over or close to the 401(a)(17) limit, in which case the salary scale is almost meaningless, espcially when the HCE represents most of the liability.

Don't hold your breath. BTW, why notify attorney? Has the (now terminated) participant told you to send all correspondence to attorney? Why is anyone tolerating this broker's behavior? Why is not the broker already gone? Is anyone planning to inform the "powers that be" of the inappropriate behavior of the broker? Broker has a license, doesn't he?

This from DOL, and also look at its references to staff report from the SEC. http://benefitslink.com/DOL/pensionconsultants.pdf

Perhaps you miss his sarcasm.

May 31, 2005 MOODY'S DAILY LONG-TERM CORPORATE BOND YIELD AVERAGES Utilities Industrial Corporate Aaa NA* 5.02 5.02 Aa 5.25 5.05 5.15 A 5.41 5.32 5.37 Baa 5.75 6.05 5.90 Avg 5.47 5.36 5.42 MOODY'S DAILY TREASURY YIELD AVERAGES Short-Term (3-5 yrs): 3.66 Medium-Term (5-10 yrs): 3.88 Long-Term (10+ yrs): 4.32 MOODY'S DAILY PUBLIC UTILITY COMMON STOCK YIELD AVERAGES Price: 267.1 Yield: 3.78 New Dividend: 10.10

You may also Search these Message Boards.

Only a little more discreet? Perhaps you should edit your message and remove the details. And it appears your client needs legal advice, where such specifics will be unavailable here.

Is this a distributable event under the terms of the plan? Likely not. But another point might be can the employer unilaterally eliminate this class from (active participation in) the plan? Must examine the plan provisions, and the ER should probably discuss with legal counsel.

Does this help? http://www.dol.gov/ebsa/faqs/faq_consumer_cobra.html