Andy the Actuary

1.401(a)(4)-5(b) defines Determination of current liabilities. For purposes of this paragraph (b), any reasonable and consistent method may be used for determining the value of current liabilities and the value of plan assets. Thus, unless the plan document specifies a precise treatment, the methods you're proposing would respect this definition. Just be consistent and would recommend that retirement committee adopt the procedure.

On the 415 side

Why are you assuming responsibility for the audit report being late. Either the Client did not get information to the auditor timely or the auditor is at fault. Why isn't this the auditor's problem to deal with? Just being onry.

"Ramifications" are what caused Mary to have a little lamb. Guess is nothing good can ever come of checking "no" to a box that IRS is looking for a "yes."

Math looks just fine. 1. What is specific plan language? 2. Either plan says FT or plan says CL. 3. If plan says FT, then you may be tied to FT on val date. Not sure what this implies if end of year val. 4. If plan says CL, then follow or establish precedent. e.g., could ve valued on val date or distribution date using interest rates on applicable date. 5. IRS says MAP-21 interest rates would apply if FT used and MAP-21 implemented in 2012. (As Mike Preston correctly points out, the IRS did not say this. They simply implied that you could infer this.)

IMHO (which is selling at a discount these days), give the actuarial increase. I've yet to have a plan sponsor who can administer this provision even when you tell him who,what, when, where, why and how. They simply fail to send the notices, or internal turnover frustrates the process. To make it work as a third party, you'd have to continually monitor the process, prepare the notice each time, and send it to the client. Then, you'd have to pray the client distributed it timely. The response to your question all falls under the umbrella of "two actuaries, three opinions."

It is possible the plan language provides the answer.

The Plan can use whatever it wants for the lump sum rates -- even the 30 year Gatt rates, so long as the PPA basis is used to determine a minimum lump sum.

So, the question is what does "by the first day of the 10th month of the current plan year" mean? Plan Year begins 12/31/2011. Thus, first month of the plan year begins 12/31/2011, and 10th month of the plan year begins 9/30/2012 (because there is no 9/31/2012). So, we're looking at either 9/30/2012 or 9/29/2012 depending upon whether "by the" includes the first day of the 10th month. IMHO, "by" means no later than 9/29/2012 -- the day before -- just as for a calendar year plan, we were all scrambling to get our certifications done so they were dated on or before 9/30/2012.

FYI In the IRS phone forum on MAP-21, today, Michael Spaid, IRS Actuary posed a question from a forum participant, "Assume a DB plan implements MAP-21 effective 2012 as intended by the law. If the Plan prescribes that the 110% test to determine restrictions on pre-termination distributions to HCEs under 401(a)(4) uses Funding Target as a proxy for Current Liability, then for this purpose may the FT recognize the MAP-21 rates?" Mr. Spaid commented, "The IRS is not taking a position on this. Do what seems reasonable."

See Notice 2012-61 A:T(3)(e)(2)

I was reminded of an incident some thirty-five years ago where an actuarial student confronted with doing a benefit calculation for a salaried union employee asked how to determine the hourly rate. I advised to look to the plan document and if silent, look to past benefit calculations for a precedent, and if there were none, we would contact the Plan Administrator about adopting an administrative procedure or amending the plan. Meanwhile, I advised, simply divide the annual pay by the total number of hours. The actuarial student returned a bit later and had taken the annual pay and divided it by 365 and then by 24 hours. "How many union employees do you know," I asked, "who work 24 hours a day year round?" The student replied, "I don't know any union employees." Shortly thereafter the student left the profession to pursue other interests.

Thank you all. Has anyone used an IPad to host or is it only feasible to use a "big boy" computer (laptop or tower)?

Apply the Plan's default election, which may be construed as a J&S. If the plan is totally silent, consult legal counsel.

Not only "yes," but in the days that 415(e) applied, it was considered super-top-heavy. (It may still be considered STH but don't believe this has any practical significance.) (Unless my eyes have failed me once again), if you read 416 and attendant regs, you'll find no exemption for one-person plans.

My eyes are old and tired so I prepare the attached Notice 2012-61 legend and thought it might be of use. As I'm unsure how or from where you printed the Notice, you will need to add your own page numbers. Notice_2012_61_TOC.pdf

"Anyone" would be my spousette. I work out of the house. Thank you!

Any users of this application to remotely access your business PC or Mac? Obviously, I work with sensitive client data, which includes SSNs, so am particularly concerned about compromising security. It's bad enough that despite antispyware galore, stuff can happen. Adding another portal just seems frightful. Any experience positive or negative would be appreciated.

A.T.A question to IRS: "Were there changes to the orginal Notice other than the addition of the footnotes?" IRS Response: "No, the only changes in the Revised Notice 2012 - 61 was the addition of the footnotes."

Ye olde way of valuing lump sums for determining the FT and TNC is still the current way. Simply, we use (at least for the present) the higher MAP-21 rates.

From hot-off-the-press IRS Notice 2012-61 (9/11/2012): "(b) MAP 21 does not change the annuity substitution rule. Accordingly, for purposes of measurements to which the MAP 21 segment rates apply, the present value of a distribution that is subject to § 417(e)(3) is determined using the MAP 21 segment rates to discount the projected annuity payments in accordance with § 1.430(d) 1(f)(4)(iii)."

Would the result be the same if terminated employment on 6/2/2008 and rehired on 10/31/2008?

Agree, must notify participants within 60 days. Unsure if notification of participants is still required if cured within 60 days.

No credit balances. Will notify Participants in the 2012 AFN if applicable. Don't know how to notify PBGC yet because depending upon whether or not IRS nukes the "annuity substitution" rule, quarterly contribution may not have been missed ! Thanks for replying.

A plan has missed it's July 15 contribution of $25,000. To cure this at once, my understanding is that sponsor should contribute $25,000 now. He would not have to contribute a greater amount now that reflects the 5% penalty and extended discount. However, before the year's contributions are completed, the sponsor will have to contributed enough so that the discounted contributions, including penalties, at least equals the plan minimum. Does anyone belief that in curing the missed quarterly, that the delay and penalty would have to be recognized at that time the curing contribution is made? E.g., contribute $25,437.