Andy the Actuary

First of all, I do not disagree with Mr. 3-eyed. However, here is where I was coming from: Plan is grossly underfunded and employer, who sells monacles to 3-eyed fish, goes out of business. Employer pulls this sham to get Plan covered following 3-eyed's train of thought. Plan terminates under distress. Are you suggesting PBGC will pick up liability up to guarantees?

We presume that this plan would not be exempt (e.g., professional corp) First, the census date is the last date of the preceding plan year so if participant entered this year, then not included for this year under any circumstance, so not covered. Second, here is how PBGC form instructions define participant: "How to Count Participants For premium purposes, “participant” means an individual (whether active, inactive, retired, or deceased) with respect to whom the plan has Benefit Liabilities." Hopefully, these thoughts are of some help.

Okay, son, I'm from Missouri, so show me. (1) Payment so long as participant is living, $1,000 (2) Payments are guaranteed for 10 years (a) If within first 10 years, participant dies with surviving beneficiary, payment of $667 is payable for balance of 10 years and thereafter for the life of beneficiary (b) If withing first 10 years, participant dies after beneficiary dies, payment of $1,000 is payable for balance of 10 years. (3) If death of participant occurs after 10 years (a) If beneficiary survives, then payment of $667 is payable so long as beneficiary survives (b) If beneficiary has predeceased participant, no further payments are due

So, wouldn't the formula be the normal 100% certain benefit, less the reduction caused by the inopportune death? Yes, sorta, but it seems as if I the carve out is still a sigma sign with with some decreasing guarantee since in (Chester Jordan terms), it only subtracts out is "x" dies before "y". each term looks something like vttpxyqx+tcertain(10-t) It's been awhile but I'm possibly off in my subscripts. My point is there does not appear to be a closed expression for this monster.

Thank you. It was clear that 410(b) has nothing to do with cross testing but it was subtle that 401(4)'s application of 410(b) escaped the gateway when testing on a benefits basis. I was unable to locate confirmation in The ERISA Outline Book.

So, you are saying the certain isn't? Certainly, the certain is certain, but only for a certain amount, depending upon who dies first -- the primary annuitant, beneficiary, or the actuary. About this I am certain.

A profit sharing plan will be tested for discrimination on a contributions basis under 401(a)(4) because the plan sponsor does not want to contribute the gateway. There are two tests: (1) The ratio test that considers rate groups (based upon contribution rates) taking into consideration only the plan being tested and (2) The overall average benefits rate test for the group being tested taking into consideration contributions allocated under certain other DC Plans. Am I correct that conducting the average benefits rate test (2) on a benefits basis does not require a gateway contribution? That is, the gateway contribution is requried only if rate groups are to be determined on a benefits basis

Very old plan has very old option which client refuses to remove even though it has never been elected. It is actually j&2/3 with 10 years guaranteed. Figuring on a j&100 the 10 year guarantee is worth about 2%, my inclination is value a J&2/3 and add 1 1/2 percent.

I forgot to add the adjective "mathematical" to expression. I.e., is there a reference how to evaluate the little bugger? We have: (1) 50% 10 years certain (2) 50% temporary axy:10 (i.e., so long as both are living) (3) 50% certain if benefiicary predeceases participant withing 10 years -- this starts with a signma sign, contains some funny probabilities, and certain annuities of diminishing duration. (4) a 10 year deferred reversionary J&50% annuity Does this cover it? Sorry to ask but I passed Part 4 in 1973 and have been out to lunch since then.

There are services that process bulk files of Social Security Numbers against SS and State records. I thought I saw some advertise some time ago on benefitslink.

Being from Missoura -- The Show-Me State -- I always ask for chapter and verse when an assertion is counter-intuitive. If you ask enough times, they'll quit assertin'

One last whip to the horse: As best as I understand, plan benefits are generally frozen and plan entry is stopped at the same date. In your case, plan entry was not stopped. Plans generally define accrued benefit as the benefit determined at any point in time. In this case, as of the benefit freeze date. Your question is how can a person have an accrued benefit if he entered the plan after the freeze date. My answer from what you've communicated: Because you let him.

(1) Please provide the plan's definition of accrued benefit. (2) It's still not clear why the frozen plan allows new entrants? The benefits are frozen. Even if I surmise (perhaps incorrectly) that the Plan is continuing to credit service for benefit calculation purposes (even though it is overridden by the plan freeze), why must you continue to let persons into the plan after the freeze date?

When an actuary speaks, I listen carefully and never discount what he's saying. That is, of course, unless I'm looking in the mirror.

Can anyone provide an expression for a J&50% survivor annuity with 10 years certain -- the continued payment for the balance of the 10 years is either 100% or 50% depending upon whether or not the beneficiary predeceases the primary annuitant?

I give - What is the purpose of allowing new participants after the freeze date? Look at freeze date as if employee terminated employment on that date. What is employee's accrued benefit under the terms of the plan document? This is blind avice given we haven't seen how the plan amendment is constructed. Can you provide it?

This is Winifred. We keep her in our bedroom closet with the 30 or so shoeboxes of pidgeons.

This rule applies to all situations and not just our agrarian friends.

Normalize according to 401(a)(4) regulations

Presumably, the goal is to avoid having to establish a new base in 2009. In such case, if you include in PFB, then cannot use PFB to offset 2009 contribution. Else, you would have top subtract PFB from assets to determine your transition percent, which would then be < 94%. Inclination would be to include it in PFB because you can always burn later if needed. Creating a PFB will not affect the 436 AFTAP so long as >=94% without regard to COB and PFB.

Mr. Rigby was kind enough to point out that their are PPA act sections that for some reason were not included in the revisons to the IRC and were not noted in WRERA. Act Section 115, for example, provides relaxed transition (e.g., 90% rather than 92% of FT in 2008; 92% rather then 94% in 2009; etc.) under certain circumstances for employers engaged in interurban or interstate public bus transportation. You will not find reference to this treatment in IRC Sec. 430©(5). Not a biggie unless your client just happens to be one of the affected employers. The point is not to get too comfortable relying just on the IRC and regulations. It also begs the question of whether or not the act should be followed to the extent it has not been codified in the IRC. Clearly, technical corrections should address this.

Come on, The Greenville Drive. Sounds like a scenic 1940s mountain drive where you'd pull off to a roadside diner to enjoy a frosty mug of rootbeer and listen to the St. Louie Cardinals on an old Crosley.

No closet for me. I was a charter member of the Harry Agannis Fan Club. I also clothespinned a '56 Topps baseball card of Norm Zauchin to my Schwinn's wheel spokes to motorize it. I was elated when the Sox finally signed Pumpsie Green. And Hawk Harrelson? I could go on . . .

I would like to offer my free baseball consulting services here. I will even throw in my dog-eared copy of Mortimer Spiegelman's Demography. Andy the other actuary is no doubt referring to the Tampico Stoagies who recently located to Bessemer City by accident.

There are TPA's who operate off a fee schedule - flat amount plus so much per participant - but then you will getting a product that possibly won't be the best fit or may have hidden problems. Also, your client may not be getting the highest level of consulting. Follow SCA's advice and get qualified help. Probably, under $10,000 is a ballpark. Then, again, how long is a piece of string? Lot's of questions need to be asked. For example, the ball game changes if say 10 years ago client had a DB plan and it was terminated.