Andy the Actuary

Next question, how can anyone other than the Plan Sponsor/Administrator (or practitioner proxy) alter a 5500? Do the changes show up on the DOL Efast website?

Only comment is that if participants had the right to elect lump sum at time pension started but opted for monthly pension, don't make the offer. Otherwise, you get into a trick bag of those who would like to change their monthly payout option to a different monthly payout option. Hey, if they wanted a lump sum, they had the opportunity.

What is meant by unfunded liability?

Here's what the PBGC instructions say: "For premium purposes, “participant” means an individual (whether active, inactive, retired, or deceased) with respect to whom the plan has Benefit Liabilities." So, no benefits liabilities would suggest do not count. You should check the definition under 401(a)(4), 410(b), 401(a)(26), IRS 5500, Annual Funding Notice, and SPD disclosures. It would not be surprising if there were some differences.

This won't give you the answer, because again, it's a default position, but the IRS 417(e) regs only state that PV must be as great as PV accrued benefit payable at normal retirement benefit. You could get into why e.r. subsidies and other ancillaries as well as the actual lump sum calculation methodology aren't included if you truly want to stir the pot. You're lucky if the plan documents describes the determination of the lump sum the way it is actually calculated!

Benefits must be definitely determinable. If the Plan says applicable mortality table without specifying post-mortality only, then it is implicit that APM applies at every age. If we said, the a.e. is the 1994 GAR and 5% interest, would you need further clarification to stipulate that the 5% applies for both pre-and post- retirement?

Even if you're adamant that THE MINIMUM calls for the use of pre-retirement mortality, ignoring pre-retirement mortality produces a greater amount so you should be okay. Consistency is more important.

Can't a paper form still be submitted? The instructions appear to say "yes."

411(b)(1)(A) states (Notice 2008-7): Section 411(b)(1)(A) provides that a defined benefit plan satisfies the requirements of the 3% method if, under the plan, the accrued benefit payable upon the participant’s separation from service is not less than (A) 3% of the normal retirement benefit to which the participant would be entitled if the participant commenced participation at the earliest possible entry age under the plan and served continuously until the earlier of age 65 and the normal retirement age under the plan, multiplied by (B) the number of years (not in excess of 33 1/3 years) of his or her participation in the plan.

In 1950, Hollywood director Edward Dmytryk named names before HUAC. This activity stalled his career. Do not name names. The IRS may stall your D-Letter. Better is to come up with a job category - e.g., exclude "Director of Advertising" or CFO.

They may want to be asked how they explain their position from the 80/120 rule posted in the 5500 instructions because no one else seems to be interpreting the rule their way.

My understanding is that once Plan falls below 100 Participants, it may file as a small plan so long as count does not exceed 120. If you file as a small plan, no audit is required. Example. 2008 115 Participants (and always 100 prior) - large plan 2009 99 Participants -- small plan but may file as a large plan (who wants to?) 2010 92 Participants -- may continue to file as a small plan 2011 108 Participants -- may continue to file as a small plan 2012 117 Participants -- may continue to file as a small plan 2013 121 Participants -- must file as a large plan 2014 115 Participants -- must file as a large plan Please call me out if you disagree

Perhaps this is style? When I suspect issue with prior filings, depending upon the seriousness of the issue, I indicate to client that they should bring opinion to attention of prior service provider and make it incumbent upon prior service provider to correct filing, if applicable. The client should not have to pay me to make correction. This issue may have a different response if a defined benefit rather than a defined contribution plan. In your situation, what did the Schedule A report in item 12, which is required to be completed if item 11 is checked "yes?"

Sure you could amend the Plan to increase the benefit for NHCEs retroactively to an amount which when the 2014 417(e) rates are applied give you the same lump sum. That's assuming there are no 415 issues. Question is what is cause for delay? When was employee terminated? Was there plenty of advance notice so that a timely distribution could have been made but employer did not act with dispatch? If not, then perhaps chips should fall where they may. For example, employee terminated on 11/27/2013. There are no reasonable expectations that distribution would be made in December, given 30 day advance notice requirements.

Sec IRC Sec. 414©, 415(f), 415(h) and regulations thereunder

Normally there is a new account set up and assets are transferred in-kind to new account (Plan should allow). However, probably wouldn't create Hiroshima concerns if account was simply retitled (which I've seen done).

Andy, thank you. The other Andy.

Please cite the section of the 415 regulation to which you are referring.

Are you suggesting you may come up with a different answer from the following proposition: A participant retires at age 99 with an annual benefit of $150,000 which is also his HC3, how do you calculate the lump sum?

Absolutely, "yes." Forever. You can find the cite in the 415 regs but logic dictates this. Otherwise, you could start/terminate plans at pleasure to increase the 415 limit.

How has this been treated historically? Hopefully, consistently. Codefy the treatment.

This question was posed like a problem from an actuarial exam. As I read it. Participant has average comp of $255,000 but say formula benefit is $180,000. However, participant (and this was not stated) has decline in compensation so that at the time of retirement, his recent high 3 is $200,000. His formula benefit is now $240,000 and the IRC (b)(1)(A) limit is $220,00. Is his benefit limited by $200,000 or by $220,000? I.e., is the restricted benefit $200,000 or $220,000. I.e., does High 3 apply forever so is High 3 limited by 415(b)(1)(A) limit in effect at time High 3 is determined? If this is not the question, please restate because we're all answering different questions!

(b) Limitation for defined benefit plans (1) In general Benefits with respect to a participant exceed the limitation of this subsection if, when expressed as an annual benefit (within the meaning of paragraph (2)), such annual benefit is greater than the lesser of— (A) $160,000, or (B) 100 percent of the participant’s average compensation for his high 3 years.

Sorry, cannot attend. Have to go to a fish-gift-wrapping instructional class at 12:34 (12:34 hours), which generally runs owing to the fish's reluctance to sit still.

The October Three consulting group issued the following: http://www.octoberthree.com/news/article/Possible-extension-of-MAP-21-interest-rate-stabilization The gist is there may be a Congressional proposal to extend the 10% corridor to 2016. Has anyone seen mention of this elsewhere?