david rigby

Data as of February 28, 2020 (Friday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 2.70 2.70 Aa 2.84 2.57 2.71 A 2.97 2.93 2.95 Baa 3.27 3.75 3.51 Avg 3.03 2.99 3.01 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 0.88 Medium-Term (5-10 yrs) 0.99 Long-Term (10+ yrs) 1.57 Observation: (1) Comparing the Avg rates to 6 months prior, current rates are 20-25 points lower. (2) Comparing the Avg rates to 12 months prior, current rates are about 130 points lower.

Terminology can be important. Please explain the difference between his "pension" and his "annuity". Is there more than one plan and/or plan sponsor involved?

The TPA has probably been asked the question as a means of saving the plan from encurring legal fees. It's nice of you to want to help but it's not your expense. Don't fall for it.

At the risk of stating the obvious, make sure all of his beneficiary designations are up to date.

BTW, there have been several discussion threads over the years related to Puerto Rico. If you get anything you can share, please post it here.

Get (and follow?) the opinion of the plan's ERISA counsel. (BTW, you can search for prior discussion threads on "sham terminations"; the same principles might apply to "sham re-hire".)

Sure, many things are meant to be a QDRO, but fail. Just a hunch, but you may need to determine what, if anything, was done when that draft(?) QDRO was submitted.

What does the plan say?

I've seen both. In fact, it happened to me: started a new job on January 2, and my employer declared me a participant on the following January 1. An administrative policy. If the ER wants to use July 1, that won't seem very "employee friendly". Note that this issue (probably) does not apply at other dates because January 1 is almost always a holiday (and maybe 1 or 2 additional days, depending on the weekend).

Think long and hard about this before making a repayment. There are many potential factors that could influence whether it is a good/bad decision. Just off the top of my head, some factors might be: (a) whether the maximum allowable benefit is/was reached (or even close), (b) whether the plan's benefit formula has changed since you left, (c) if the plan is not frozen now, what is the likelihood of such occurrence, etc. Other actuaries may contribute additional concerns.

As far as I know, there is no prohibition to being more generous than the statutory minimum. However, I see a couple of considerations: - Could this proposed amendment be considered discriminatory? - Would the sponsor want to improve the QPSA for all potential deaths? ie, distinguish between the death of an active participant vs. a VT participant?

Have you reviewed the most recent EPCRS document(s)? https://www.irs.gov/retirement-plans/correcting-plan-errors

Do you need to edit any of the dates in your post?

Several years ago, I built a spreadsheet (and put it in public domain) for the purpose of calculating ROA, using actual values (assets, contributions, expenses, distributions). I intentionally chose a "middle ground": using exact days for every transaction can be very tedious, but using 1/2 year average seemed oversimplified. My compromise was to use monthly amounts and weight contributions at the middle of each month, benefit payments weighted at the beginning of each month, and expenses at the middle of each month. Before you decide on the funding method question, I suggest you test your methods. Only then can you evaluate whether it really is "very minor".

Data as of January 31, 2020 (Friday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 2.82 2.82 Aa 2.95 2.78 2.87 A 3.13 3.09 3.11 Baa 3.44 3.84 3.64 Avg 3.17 3.13 3.15 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 1.28 Medium-Term (5-10 yrs) 1.39 Long-Term (10+ yrs) 1.93 Observation: (1) Comparing the Avg rates to 6 months prior, current rates are about 50 points lower. (2) Comparing the Avg rates to 12 months prior, current rates are about 115-120 points lower.

Are you sure this participant was vested?

While my reading is sometimes flawed, I know it's a DB plan. I'm just trying to figure out why, as CuseFan notes, the OP want to "make participants whole". What else is going on in the original question?

Since you did not ask a question, I wonder if there is a prior discussion thread on this topic. If so, perhaps you can link it.

Is this a cash balance plan?

Ditto to all of Effen's comments. However, it's very important to have this discussison with the auditor. For example, if you think a reasonable rate should be X%, and the plan sponsor wants a higher rate, it's possible the auditor will express an opinion that helps your argument.

Just my opinion: I suggest NO ONE answer this question on this Board. If the sponsor is upset about being charged a fee, the first question is "what does the service agreement say?". Charging a small fee is generally considered reasonable (i'm not defining "small"), assuming permitted by the service agreement. The corollary issue might be the amount of the requested fee. If so, the sponsor might wish to "take a survey" by calling a few TPA's (or the new TPA can do so) to ask about this fee/process in general, just for a market-based comparison. Lastly, the sponsor might find the fee is negotiable. Suggest an alternative amount?

Duplicate post. Please put replies at this location: https://benefitslink.com/boards/index.php?/topic/61456-alternate-payee-rmd/&tab=comments#comment-300207

You mean, like "pension simplification"?

Get paid in advance!

Notice 2020-07 was issued today. PS. Amend the plan to use October or November rates!