Andy the Actuary

Thank you all for taking the time to educate an old guy beyond the textbooks.

Sounds like a question for the plan administrator's benefits attorney.

1.05 eliminated for small plans by WRERA. SEC. 122. MODIFICATION OF INTEREST RATE ASSUMPTION REQUIRED WITH RESPECT TO CERTAIN SMALL EMPLOYER PLANS. (a) IN GENERAL.—Subparagraph (E) of section 415(b)(2) of the 1986 Code (relating to limitation on certain assumptions) is amended by adding at the end the following new clause: ‘‘(vi) In the case of a plan maintained by an eligible employer (as defined in section 408(p)(2)©(i)), clause (ii) shall be applied without regard to subclause (II) thereof.’’. (b) EFFECTIVE DATE.—The amendment made by this section shall apply to years beginning after December 31, 2008.

Lump sum = $10,000 x Max (156.04,176.30) = 1,763,000 Annuity Conversion = 1,763,000 / Min (149.07, 156.04, , 176.30) = 11,826.66 Since Comp3 = 11,000 Must reduce benefit 10,000 x 11,000 / 11,826.66 = 9,301.02 Lump sum = 9,301.02 x Max (156.04, 176.30) = 1,639,770 Check! You've addressed using the traditional way of reducing the factors; the approach outlined tends to follow the regs. 6:1 1/2 doz of other In short, give the worst of all worlds!

There is a presumption that the IRS will impose a fine for late filings. I've been involved with late filings where the client presented their reason as well as emphasized they have a history of filing timely (in this case would have to be some other business filing or possibly the 2013 filing by the time the IRS gets around to reviewing the matter). The IRS has accepted this line of reasoning. This will not preclude them from sending a computer generated letter that imposes the fine.

Thank you. The question was more than it was being done elsewhere but what was the approach to determining the 13th check?

Other than paying taxes, I do not provide actuarial services in behalf of any government entity. Nevertheless, I'm curious how actuaries might approach the "13th check" that Detroit General Retirement System paid its retirees. As I understand (and please correct if off-base), liabilities were valued assuming say an 8% r.o.i. target. In years when investments outperformed the target, some portion of the "excess" earnings were distributed to retirees. Thus, because good year's investment performance was not there to offset bad year's investment performance, the investment target % could not be met. In short, there was a failure to understand or pay attention to what long-term rate of return meant. Clearly, what was done in practice would be acceptable if the excess earnings were determined by comparing plan assets with the liabilities evaluated at a conservatively lower target rate, such as 3% and then distributing part of the excess, if any. Has anyone out there seen this approach used or in addition to Detroit, does the rest of the world not behave so rationally either?

(a) I unilaterally give you my permission to do whatever you want in accordance with my general caveat. (b) The information on the SB didn't change so even if the original signer was croaked, no need to revise SB IMHO.

Oooh, oooh, think of the fun. The one-person firm signer of the 2011 SB is now deceased. If you need to resign, you would then need to have the 2011 valuation redone and recertified. Oooh, oooh. I'd use the amend button and simply change whatever has changed. Since you're changing census count and you're submitting in behalf of the plan sponsor, then you'd necessarily have to have the Plan Sponsor sign and amended form for attachment so that the photo copy of the signed form matched up with the electronic filing. I would not go through the CYA authorization process again since presumably the language in the filing authorization granted you permission to file an amended form.

Perhaps a more general question. Is it kosher for my pension plan to credit a gift (check) from Sonyasingla with whom I have no affiliation nor does the checkwriter have any interest in the plan as participant, beneficiary, or alternate payee?

My Mom used to say, "Son, no hurry. When you get a chance, I need you to do . . . " This meant if I were having open heart surgery, they should stitch me up so I can get to her request.

Analysis sounds right. Normally this works to advantage in small plans because participant gets paid maximum lump sum, continues to participate in the plan (to satisfy 401(a)(26)), earns a benefit under the formula, but then has the formula benefit completely offset by the a.e. of the benefit paid, and no further benefits are payable.

I believe this depends on whether 100% of average comp is less than 401(a)(17) average. E.g., if average comp equals $60,000, you get a different answer than if comp each year prior to application of 401(a)(17) is $500,000.

Social Security's Real Retirement Age Is 70 "Due to increases in Social Security's Delayed Retirement Credit, the effective retirement age is now 70, with monthly benefits reduced for earlier claiming. Benefit levels at 70 appear appropriate given that rising deductions for Medicare and greater benefit taxation have reduced Social Security's net replacement rates. The shift to 70 should be feasible for many workers given increases in lifespans, health, and education. But vulnerable workers forced to claim early will have low benefits and will be particularly harmed by any further cuts. Policymakers need to inform those who can work that 70 is the new retirement age and devise ways to protect those who cannot work." (Alicia H. Munnell, Center for Retirement Research at Boston College) Dear Ms. Munnell: You may wish to apprise your readers that neither Congress nor the Social Security Administration has altered the promise. The delayed retirement increase was envisioned as a sweetener not as a take away. It became 8% a year in 2008 as part of the 1983 amendments to the Social Security Act. That's 1983! 25 years advance notice should not be viewed as dropping a bombshell. Where ya been? Frankly, you're the first person who has even suggested that starting benefits at SSNRA is tantamount to claiming benefits early. Truly, the only protection is needed is from propagandists who wait 25 years to spin a dark web around the Social Security Program. To insinuate there is something duplicitous going on is shameful. Perhaps your time would be better spent devising educational means which responsibility you've conveniently delegated to that nebulous group called the Policymakers.

Let's not overlook the potential devastating bad press that could affect donor giving. And of course, you will be unanimously selected as the reason to serve up to the Board of Directors as to why all of this is happening.

Oh, how deliciously nasty. If you revoke the plan termination, then you likely will have made unacceptable in-service distributions. If you can miraculously create a partial plan termination, then somehow you'd have to be concerned about non-discrimination. I.e., you will have paid out a group that constitutes a discriminatory group. You've only mentioned PBGC but are there not IRS issues when liabilities have not been settled within a reasonable amount of time after receiving a D-Letter, assuming a D-Letter was applied for and received? Sounds as if you would either (a) communicate with both PBGC and IRS about a plan or (b) ride bareback and take your chances. No doubt each agency has seen this situation though as always, the challenge will be identifying and locating the parties who have been through this. Most important, the client has already communicated with Plan participants who no doubt have certain expectations of receiving their distribution. The last ointment fly your client needs is some irate employee running to the DOL. Given that there will be a delay, the remaining employees need to be apprised as well as given a time line. Oh yes. There's also the standard actuarial advice: Consult with legal counsel.

I will tell them!

If you have any questions, try "replicating" the form and seeing for yourself. You can always delete the replication if you're displeased with the result.

My understanding is the entire enchilada. But that's don't difficult. EFast provides a replicate filing option. You can replicate and make the corrections. The option carries the attachments with it.

If the auditor is culpable, then they should direct [in writing] since they would be looked to for compensation if all blows up. Else, if the client is culpable [e.g., they didn't get information to the client timely], then they will have to deal with. Even if you file under a corrections program, wouldn't the client still be better off submitting the filing ASAP? Our government at unwork may help here because the client was unable to make contact with the government in advance to see how best to handle when they are aware the filing may be submitted late.

To me it isn't clear why there is a filing required for a request that is automatically approved. Simply, change the filing deadline for all and avoid the paper.

Those who have created software understand two things (a) the fewer heads involved the better and (b) a better product is engendered when end-users are involved. One has to believe that there are numerous systems analysts and programmers involved a number of whom do not even understand the essence of what they're systematizing. At least, I hope this is true and the evolving problems are not simply a matter of gross incompetance.

It all made sense until you were suggesting to use two different methods for determining the Schedule SB contribution reporting dates. I'd be consistent and always use the check date. This is especially true if there is ever an audit and you tried to argue the 9/13 date as check date being acceptable.

If reply is available on IRS letter, I'd reply with copy of filed 5558 with the notation from the 5558:"The application is automatically approved to the date in line 2 blah, blah, blah." We comply. Fix your system. If you are a member of ASPPA, you may want to let them know. They're right on in championing the underdog.

Here is link where you may locate rev. rules, rev. procs., etc. http://www.legalbitstream.com/irs_materials.asp?pl=i2