Andy the Actuary

It’s been five years since I retired and I’m pleased to admit that I have forgotten everything pension except the friends I made as a result of BenefitsLink.

While retired, still got the math gene. The answer is one-sixteenth.

In retirement, have given all my books to the war paper drive, so can't help on specific reference. Recollection, however, is can require more than 1,000 hours for full-credit but must grant partial credit if greater than 1,000 hours. This I believe was described in an DOL reg. 2530-200b.

A delightful sticky issue.

Let's start by supposing this is the 1950s, you are in the automotive repair business, and your former customer is attempting to obtain his servicing record from you. And you store servicing tickets in boxes by year in numerical ticket order. To what extent should you work for free? On the other hand, if you have a client folder, you might want to provide copies so long as the client is willing to pay reproduction costs.

Now, back to the present. If the client were audited by the IRS who demanded the data, doubtful the former actuary would hold the data hostage. It's a small client and sounds like a small actuarial firm that may or may not been employed under an engagement agreement and even so, such agreement might not have covered data transfer in the event the working arrangement was terminated.

My own position is that I'll entertain discussion to provide gratis information that the client hadn't sent me and that I hadn't sent to the client. Thus, if the new actuary were arrogant and annoying, I would indicate that I have operated from census sheets the client has provided and the new actuary should obtain these from the client. If the new actuary wants me to save him time, too bad.

In my past life working for a major actuarial firm, I saw situations where big dollars were charged for data transference.

In you client's situation, I advise the client to pay the $1,500 but make sure you understand what information your getting and in what format. Else, the client cost may greatly exceed what you have presented as a $1,500 rip off. And you need the data now and not after some lengthy legal or ethics battle.

Keep in mind. This is not your dog. The client needs to decide how to proceed. You need the data one way or another and its the client's money.

Still, you hate to see people stepped on but bull your neck.

End of consulting sermon. I'll personally email you to instruct where to send my consulting fee. This was covered in my engagement agreement!!!

Is employer required to reimburse employees for the emloyer's share of the Social Security/Medicare contributions made while considered an independent contractor?

Even if classified as employees, did plan satisfy 410(b) if they were excluded?

You should follow the plan document. Your question is one of the reasons the Relative Value disclosures are required.

It is interesting how Congress and media refer to the closing of a Social Security loophole when they modified/rescinded the file-and-suspend strategy.

When my wife turned 65 and applied for Medicare, we went to a Social Security office to discuss Medicare along with retirement strategy. The SSA recommended that at 66 my wife apply for Social Security, delay her start to age 70 to get the 8% sweetener, and start taking 1/2 of mine, which she's been doing for two years.

Interesting that SSA was disclosing and recommending the strategy that Congress identified as a loophole.

Mr. 2 Cents: Only caveat with (2) is that by making a greater contribution, plan sponsor could be creating a credit balance he might not later be able to use or worse, it could be forfeited to attain a AFTAP threshold (e.g., 80%)

It's interesting that Congress can manipulate pension liabilities but will mulct [look it up] plan sponsors who attempt to do the same. Perhaps if Warren G. Harding were running for President today, his campaign slogan would be "Back To Entry Age Normalcy."

The best part of the variable premium is that the UVB is based upon vested rather than guaranteed (vested) benefits! Thus, Plan sponsors pay premiums to protect benefits that are not guaranteed.

It sounds as if you were the preparer of the 5500 (or are you the auditor?) If the case, nothing gets fixed without the authorization of the plan sponsor since doing so might subject the plan sponsor to penalties. On this note, be prepared to walk away if the plan sponsor says "no." I say plan sponsor but not being a compliance expert, unsure whether plan admin, plan sponsor, or trustee is at risk.

It might be helpful to others to disclose your role and whether it was an external trustee or plan sponsor trustee who is at fault.

Thank you GMK. My recollection is that Plymouth was among the first cars to offer these circa 1956. The most famous was the Edsel which positioned the buttons in the center post of the stearing wheel.

Good thing you gave the obscure hint because age 72 and 43 (among others) work as well. The record is neither a 45 nor 33 1/3 and you've been enjoying RMDs for nearly a decade.

Yes, Tom, it was found after its official name, "mimeograph." You could color your hands blue in no time from the "master," and the produced pages were nice and cold -- and yes -- you could get high from them.

Glad you brought this up because it reminded me of the gallon jar of white construction paste that was applied to heavy colored paper with a popsicle stick. Of course, it taste good, too, which made me wonder in later years why if you weren't supposed to eat it did it have a minty flavor.

Do you still write with an Estabrook?

As "they" said, "You ain't seen nothing yet." See attached for list I've compiled over the years. (Don't get flustered as some is local stuff that will be meaningless to you.) I won't tell you the year I was born but I will tell you if you reverse the year's digits, you'll have the year I graduated from high school at age 18, and that I was born after 1939 and before 1950.

Gone But Not Forgotten.pdf

Sound as if learning the naked truth required more than the bare facts.

Or by asking the check's payee . . .

By the way, you've already exceeded $235 in consulting fees!!!

When all else fails, ask the recipient for the missing information. No doubt you can figure out some way to make this go away quietly. The more you ask questions, the deeper the hole gets.

So long as owner has long-term history of filing timely, file and then deal with IRS. Have found IRS to be understanding and forgiving when there is no history of chronic abuse.

Never use a check as a bookmark!

If you can verify you had such a plan and participant, reissuing the check will cost less than asking legal counsel what you should do.

Confusion in your matter not generally an issue among very qualified people in pension design involving defined benefit plans which generally excludes CPAs. Retain an actuary to maximize and protect your deduction.

Sounds as if the filing would not technically be timely submitted.

You can probably estimate with a small degree of error by the annuity amount whether the employee was an HCE or NHCE.

You should have a liability for the annuities purchased on the PBGC basis used to determine the unfunded vested benefits. You could use the NHCE liabilities as a proxy. If the result is not material, then you could go with the result and actually play with the numbers by using a scaling factor to see if you used 90% to110% of the liabilties would it be material (does it matter if the answer is 91% or 95%?)? Then, if not material you could certify and qualify in your certification.

If results are material or you feel discomfort with this suggestion, then the annuity provider should be able to provide a breakdown of costs.