david rigby

Only for purposes of a very rough estimate: to "convert" the 5.08% factors to those using 4.75%, multiply by 1.03.

Top heavy?

yes. If the employee was previously reported on SSA (due to VT status), advisable to remove him/her on the SSA, as well as adding the surviving spouse.

I agree with MGB's explanation and annuity values. If you need more decimal places: immediate at 59: 161.07316 immediate at 60: 157.79831 immediate at 62: 151.05205 immediate at 65: 140.57747 deferred from 59 to 62: 127.81620 deferred from 60 to 62: 135.03101 deferred from 59 to 65: 99.78263 deferred from 60 to 65: 105.41503 BTW, not very likely that 5.08% will be valid for 2004 payments, probably closer to 4.75%. This could be significant: by postponing a possible retirement only 2 months (from 12/1/2003 to 2/1/2004), you might increase the lump sum by about 3%. But, that also depends on the factors outlined by MGB relating to rounding, how age is calculated, and possibly other administrative procedures.

Hmmm. OK, I'll buy that argument.

Based on the facts given, the method can be changed even though it was changed within the last 5 years. See 4.01(5) of Rev Proc. 2000-40. See also, this discusion. http://www.benefitslink.com/boards/index.p...ST&f=22&t=19350

Thanks for the commentary. I think I agree with your post Blinky, but am confused about your emphasis. For the 2002 schedule B, instructions for Line 1(d)(2)(a) includes “However, a special rule under Code section 412(I)(7)©(i)(III) allows a rate up to 120% to be used for the 2002 plan year.” Then, Line 4a includes “…except that 120%of the weighted average interest rate could be used for the 2001 1(d)(2)(a) calculation if the special rule under Code section 412(I)(7)©(i)(III) is being used for the 2002 plan year.” The “if” in the latter quote might imply that the Line 4 calculation (which is the ratio I asked about originally) at 120% for 2001 is valid only if it is used on Line 1(d)(2)(a) for 2002. Am I reading too much into this? If this interpretation is valid, anyone see a reasoning why the 2002 rate should be greater than 105% in order to use it for 2001?

Sorry for my sloppy phrasing. I have heard others express unhappiness with Wickersham. I agree that losing his willingness to participate in discussions, and to offer opinions, would be a loss for many. The depth and breadth he has brought to professional meetings has always been important.

We'll be glad to help. Need some information first. You do not have to tell us the amount of your benefit; we can give you the factor to use, then just multiply. (The following assumes you are covered in a pension plan that is not sponsored by a church or a governmental organization.) 1. we assume you are entitled to a pension benefit that is payable monthly. correct? 2. on what date (not age) is the benefit assumed to commence? (perhaps you have more than one date in mind.) 3. specify any early retirement adjustment that must be included (if not already included) 4. your date of birth. 5. the plan year (defined in the plan as the fiscal year on which plan records are kept); not necessarily the same as a calendar year. 6. the plan's definition of how it defines the interest rate for making such lump sum calculation (for example, "the rate in effect for the month prior to the beginning of the plan year") and the time period over which it remains stable (for example, the plan year or a plan quarter). 7. normal form of payment for your benefit, without adjustment, such as lifetime annuity, etc.

Judging by some comments I have overheard, others may disagree about that.

Regs. available here: http://www.access.gpo.gov/nara/cfr/cfrhtml...26cfrv5_00.html

....of course with consideration for the exact language of the plan and amendment. The amendment could be more generous than the minimum required by 411(d)(6).

Today is bozo day. Can't find this anywhere, and reading the statute is difficult. For the purpose of determining whether quarterly contibutions are required for the plan year beginning in 2002, JCWAA allowed the plan to recalculate the 2001 current liability funded ratio using an upper bound of 120% of the CL rate. In order to utilize this, did the 2001 CL rate already have to be at the 105% level?

Does the exclusive benefit rule have a bearing?

This IRS ruling might be useful. http://benefitslink.com/IRS/revrul2002-84.shtml

IRC section 417(e)(3) provides for the “applicable mortality table” and “applicable interest rate” used for calculating minimum lump sums. The current such mortality table is the unisex version of the GAR94 table (with projection) as the IRS has given in Revenue Ruling 2001-62. Under current statute and regs., the mortality table is defined as “based on the prevailing commissioners' standard table (described in section 807(d)(5)(A)) used to determine reserves for group annuity contracts issued on the date as of which present value is being determined (without regard to any other subparagraph of section 807(d)(5)).” Recently (sometime in 2000, I think), at least 26 state insurance departments/commissioners adopted this table for group annuity reserving purposes. At that point, it became “prevailing”, and the IRS was required to specify it (or some variation) as the table to be used for this purpose. There is no theoretical reason why the RP2000 table could not be used for current liability purposes. However, it is unlikely the insurance commissioners/departments of the various states will choose to adopt it. The RP2000 table was developed specifically for defined benefit plan purposes, while the GAR94 table was developed for the purpose of updating group annuity reserving processes. An actuary will calculate life expectancy using a mortality table (chosen as appropriate for the purpose). In general, a mortality table consists of probabilities of death at each age. An actuary's training includes knowing how and why a table is constructed, to make sure the most appropriate table is used (for example, a table based on disabled persons would not be appropriate to use in valuing group annuity reserves). The actuary is also trained to use that table to calculate life expectancy, or joint life expectancy where a spouse might be included, or any other determination for actuarial value.

This would be a surprising result. The employee will probably want the insurance company to document its statement, including demonstrating where such provision is included in the plan/contract. There is probably also an appeal procedure.

When it comes to California courts, one never knows, but perhaps this discussion thread will help: http://www.benefitslink.com/boards/index.p...=ST&f=89&t=2851

Probably, but it might depend on the specifics of the POA, and whether the POA is due to incapacity. The participant probably needs competent legal advice. The plan might also.

This table, and its development, has hit the news lately. http://www.actuary.org/pdf/pension/nyt_050603.pdf http://www.plansponsor.com/pi_type10/?RECORD_ID=20596 http://www.actuary.org/pdf/pension/portman_050603.pdf

A little clarity first please: merged or terminated. Which is it? Can't be both.

This is one of the most frequently discussed topics here. I suggest using the search feature.

Sorry if nothing was on point. I thought there was explicit regulatory statement that no divestiture was required. The answer is "no" (I think).

The first part of Mike's post is more urgent than the second. Discuss with the prior actuary is much more important than involving the ABCD, at least for now.

Several prior discussion threads on this topic. For example: http://www.benefitslink.com/boards/index.p...ST&f=20&t=14565 http://www.benefitslink.com/boards/index.p...ST&f=22&t=18394 In general, you might the search feature (with keywords such as “qualifying employer”) http://www.benefitslink.com/boards/index.p...p?act=Search&f=