Andy the Actuary

1. It's unusual for Plans to address TVs who have passed NRD. They're supposed to start then. If you haven't, check document to determine whether or not it specifies a particular treatment.

2. See 1.411(b)-1©(2)(d)(3) regarding decrease of AB owing to increase in age or service.

3. May need to amend plan to incorporate retroactive annuity start date.

4. If you're an attorney, fix it; else, confer with a benefits attorney.

Effen, thank you but how can you reasonably expect us to prosper when there are posters to this blog who want to under-cut our prices?

Effen, in 1970s was involved with a couple takeovers where sole purpose was to close company and recapture pension reversion. At that time, Excise tax was 10% and no 417(e). Thriving companies were killed and employees lost jobs owing to greed.

Personal take is pension law has had holes since the conception of multi-employer plans. For example, underfunded plans (whatever that means!) should not have been permit to negotiate past-service benefits. So, for example, if you had a multiplier of $10 / year / service and the Plan was underfunded, then the benefit multiplier could be increased to $12 only for future service. I.e., do not allow an underfunded plan to create windfall benefits.

My recommendation would be -- so long as it is not contrary to the agreement signed with the documents provider -- make changes to the document and submit for D-Letter as an individually designed plan. Since I'm not an attorney and only providing supporting information to the filing, have no idea how the IRS might react -- even if you spelled out exactly what you were doing. It might depend upon the examiner. It's easy to envision some examiner might contend without establishing any basis whatsoever you can't do this though all you're doing is pulling together words from different sources and calling it an individually designed document.

Better recommendation: You used a prototype. It no longer works. Have an attorney restate your document with the desired changes.

Mike, is an individually designed plan for which an IRS determination letter is not sought grounds for malpractice? That is, if you modify a prototype but then disclose to the sponsor/PA that its underlying IRS determination letter no longer applies, do you still suggest that exposure to malpractice still applies?

From St. Louis Post-Dispatch.

While PBGC is mentioned, IMHO this is truly about Congress attempting to save the PBGC from bailout.

Bill McClellan_ Pulling the rug from under retirees _ 12-21-2014.pdf

On facts and circumstances sounds okay but what about from perspective of future employees? How does this feel if you allow for the possibility of NHCEs? You may not have a 401(a)(26) issue but then in practice you may have a 401(a)(4) or ADEA issue.

Last post before retiring to my banana tree, where I will do whatever I see.:

I've taken over tons of poor work that came off of some technically deficient valuation system prepared by an actuary who didn't exercise much care.. Sometimes, you can't even tell from the actuarial report what plan is being valued, the actuarial assumptions, or whether the data is reasonable.

Who is the Ayatollah that determines whether or not an actuary's fees are high?

Economic theory suggests that high prices and large profit margins will induce new suppliers to enter the market, and as supply increases prices will decline.

Andy T. A.'s law: When you're the last blacksmith in town, you are no longer in a competitive market. What about those actuaries who still use DOS systems. How do they make their calculations when their PC has no mouse?

Lou, thank you!

Lou, the late St. Louis Actuary Josh Jacobs was a highly intelligent (an attorney) who easily (no exaggeration) wrote Part 4 (Life Contingencies) about 15 times. Josh was plodding so just could not bring himself to rote memory and would have to derive formulas while taking the test so always left too many questions unanswered. All budding actuaries in the St. Louis area in the 1960-70s likely sat for Part 4 with Josh.

Josh finally got a 6 on Part 4 and perhaps was the only actuary in the history of the Society who became an ASA and FSA at the same time. Josh was finally able to push the button.

I feel blessed when I can get a timely appointment. I'd have the plumber remove my ingrown toenail but he charges too much for the house call.

Tom, thank you for reminding me of this old chestnut (and my Dad). A classic story which I remember my Dad telling in the 1950s. Only it was a mechanic who pulled a screw out of his tool box and got the cutting machine to start working. The cost of the screw was 5 cents and knowing where to put it, $999.95.

The poster is a breath of air. For the longest time I believe I've charged too much for my services. After all, I'm simply pushing buttons and all of my clients follow my advice explicitly. I am immediately cutting my rates by 50%. I have similar feelings about my internist who has been practicing medicine for over 40 years. Why should I have to pay for an expensive office visit for him to remove an ingrown toenail -- sounds pretty mundane to me and something she should be able to perform falling off a log backwards unless I experience anaphylactic shock from the local? I will go to the AMA website and offer up a post similar to the actuarial post just as soon as I can develop the chutzbah.

Mr. Effen. Allow me to conjecture that the decision was recently made and uncertainty of whether implementation can be timely. I could scold that someone was asleep.

However, had a long standing client with whom early each year we would have planning meeting. We always covered the potential DB plan termination. "No, no, no. We are not going to terminate the plan." So, I was repeatedly told.

So, over the past 5 years several material changes were made to the plan that created grandfathers, changed the lump sum stability period from annually to quarterly, and changed the plan year. The Plan became complicated as can be. But, that was okay because it was an on-going plan sponsored by a financially healthy organization. So, it was okay. Well, the organization is still very much healthy. However, earlier this year, plan sponsor decided to terminate DB. Now we have a grizzly bear to contend with.

In short: In the most controlled of laboratory environments, organisms do what they damn well please.

This is not difficult. Apply the default which is either to buy a deferred or immediate annuity in accordance with the election package. Presumably, the package told the participant what would happen if the package was not timely returned.

Nothwithstanding 2-center's appropriate comments, what would you be testing if no benefits are being accrued?

If Plan states FT, then "yes." If plan refers to current liability, then "yes" but you may want to confirm with attorney. Opinions only.

Here's a thread that might be helpful: http://benefitslink.com/boards/index.php?/topic/52382-question-about-retro-payments-and-rollovers/#.VGV9EMu9KK0

You may want to check eith Mike Preston because it would be surprising if what you're proposing to do is what he "said." In this regard, you may not want to ascribe a position to a practitioner without citing a published reference.

(2)

May have required Schedule P to start the 3-year statue of limitations.

Sounds as if someone out there was thinking, "There must be some more crap we haven't thought to ask for."

The zany part is you don't/can't file this until after the Efast2 submission a la Item Part I.B. What is so ex-post facto about the information on form that it couldn't have been included with the 5500 or related schedules? It's interesting that a lot of the requested information (e.g., coverage test) used to be on the 5500.