Andy the Actuary

So, if the participant refuses to pay the fees, then how are they paid (e.g., the participant's accrued benefit is actuarially reduced?). In such case, how is reasonableness substantiated? Suppose because of back-and-forth, the actuary's fees are $1,400. Is the actuary now subjected to the legal process (depositions, etc.) to support such fees? Supose the fees are a more perceptively reasonable $400. Is the actuary still subjected to the same process? Let me add that the QDROs in which I've been involved have customarily involved two angry parties (three if you count the client) and the pension plan, besides the two beaten up jalopies, is the unhappy ex-couple's only significant asset. You failed to add that most QDROs are not drafted by the knowledge Sieve. They may be boiler plate and require a lot of effort and discussion to arrive at a QDRO that does not contravene the plan or the law. I can think of at least one aging actuary who would not want any part of this.

What am I missing? You're telling the ppt here are the fees. If they say no and submit the QDRO anyway, then what? The Plan won't accept?

Unfortunately, what would be the basis for assessing a charge for review of QDRO? I.e., how can you tell the participant you won't administer the QDRO unless he ponies up? It would, however, seem that the attendant fees could be borne by the plan. Nonetheless, you offer an oxymoron when you refer to "the reasonable administrative fees related to the preparation of a QDRO." For most of my sustaining clients, I quit writing down time when it passes a perceptively unreasonable length, which is often very early for most QDROs require review, re-review, and re-re-re-review. 414(p) should be revised to provide that the cost of the QDRO should be borne by the participant's and alternate payee's legal counsels. The Lords who created 414(p) clearly had no vision as to the bete noir they created.

Yes, funding standard account was changed from end-of-year balance to beginning-of-year balance. Here is item 19 from 2008 Form 5500 Schedule SB: 19 Discounted employer contributions – see instructions for small plan with a valuation date after the beginning of the year a Contributions allocated toward unpaid minimum required contribution from prior years b Contributions made to avoid restrictions adjusted to valuation date c Contributions allocated toward minimum required contribution for current year adjusted to valuation date

Semantics, I believe. When Chamnix said 2008 receivable, I interpreted as a 2008 contribution that is receivable at the close of the 2008 Plan Year, not a 2008 contribution that is receivable at the end of the 2007 Plan Year.

Spousal consent is not required even though participant consent is required. See 417(e) and 401(a)(11). (A1lso, relative value disclosure is not required.) Despite the IRC, you should check the plan to confirm that it does not require spousal consent.

I have taken the approach of reporting the 2008 minimum contribution as that contribution payable 9/15 on a calendar year plan. Then, if the client pays earlier, so be it. We can always choose not to create a pre-funding balance, which only muddies the waters. In short, generally have understated assets for 430 which is only an issue if client wants to make maximum deductible contributions. In short, absurd laws demand practical solutions that are in themselves, absurd. In the end, what is important is that client contributes enough but not too much.

I subcontract 1099Rs as needed. Still, the entire process of instructions and review assume far more hours that I can bill for.

Won't WERTA remove restriction from distributing deminimis lump sums? Since spousal consent is not an issue, has your problem gone away?

Not stupid at all. I had this discussion recently with a person involved with this situation. I know we would still file a 5500 rather than a 5500-EZ for 2008. Nonetheless, it is unclear when the plan ceases to be subject to PBGC juristiction. I'm unsure at this point how to notify the PBGC they're no long involved without filing with the PBGC. These are questions that need to be addressed. Just write the PBGC for a coverage determination with the facts showing when the plan ceased to cover any non-substantial owners. It's pretty easy and they are pretty quick. Not sure if the PBGC will rule by end of year but we submitted one earlier this year on April 7 and had Ruling form the PBGC on May 2. That inculded an interim corrispondence to clear up a minor question they had. Hey, guess what??? Despite the 2000 Blue Book Q16 (posted on the PBGC website) confirms what you are saying, the PBGC still wants the Plan to file the 500, 501, and actuary's sufficiency statement. The PBGC is saying that since all the non-owners involuntarily terminated on the same day, the standard termination process applies. Of course, this is a process you cannot comply with after the fact because of the deadlines and notifications. Anyone been caught up in this morass before?

Okay, a little cutting/pasting from the pdf of Notice 2008-85, and filtering through some string functions, etc., etc., and so forth -- but no data entry -- produced the attached. Please (anyone) who has the time, randomly check some values. It will be greatly appreciated. Andy - it looks like the last digit of the mortality rates got lopped off for ages 100+. Here's what I'm getting for APRs at age 18, SLA with 5% interest: Male combined funding table for 2009: 232.782 Female combined funding table for 2009: 234.376 Unisex (417e) table for 2009: 233.548 Can anyone confirm? Thx. ... s I will confirm. You are correct, though I can provide no explanation. Thank you. I never noticed because I am actuarially unpure and always round factors to two decimals, so we get same answers. Nevertheless, I'll see what I can do about fixing soon as I can locate my round tuit.

That's not farfetched at all. In fact, with economic conditions being what they are, the participant probably can't afford to stay dead for very long.

Liquidity: When you look at your investments and wet your pants.

You and I are members of the same choir. It's simply our choir leader "sucks." Again, I argue the fix is not to amend PPA but to scrap it.

(b) AMENDMENT TO 1986 CODE.—Subparagraph (B) of section 430©(5) of the Internal Revenue Code of 1986 is amended— (1) by striking clause (iii) and redesignating clause (iv) as clause (iii); and (2) by striking clause (i) and inserting the following: ‘‘(i) IN GENERAL.—Except as provided in clause (iii), in the case of plan years beginning after 2007 and before 2011, only the applicable percentage of the funding target shall be taken into account under paragraph (3)(A) in determining the funding shortfall for purposes of paragraph (3)(A) and subparagraph (A).’’. © EFFECTIVE DATE.—The amendments made by subsections (a) and (b) shall apply as if included in the enactment of sections 102 and 112, respectively, of the Pension Protection Act of 2006. There is no indication that this amendment may be applied at the plan sponsor's or EA's discretion.

A prohibited payment by any other name is still a prohibited payment. The Aug '07 proposed reg. considers a prohibited payment to a beneficiary to be a prohibited payment.

My reading was mandatory. If it is not mandatory, then 2008 Schedule SB might need to be revised to indicate whether EA has recognized WERTA.

Can anyone provide a link to IRS, DOL, PBGC email addresses? I'm attempting to find the email address of Nancy Martin at the PBGC. Thank you, andy t. a.

Annuity contract sounds like an investment. Have to take care that owner cannot buy the annuity out of the plan at some low surrender value. This would be tantamount to the springing cash value LI contract. Annuities good or bad? Two actuaries, three opinions. Mine: It depends.

Would suspect it is in the examiners checklist and even if you have a flat benefit of $1/month year/service, they may be looking for the 415 language.

Calendar year plan. 2008 AFTAP=91%. 2009 AFTAP= 72%. Discussion bandied about is whether EA should certify 2009 AFTAP early and thus restrict lump sum payments or wait until say September 30. Further, question that has been posed what does the client want. Perhaps, our answer lies in the attached? Pages_from_ea_program_booklet_fall_2008.pdf

Dean Wormer never would have spoken so colloquially about one of the dreaded Deltas!

Another pot-hole. A vote for using the TNC as a proxy.

As trust and confidence breaking as 2008 has been, there are far worse years to forget. In fact, as I accentuate the positive and eliminate the negative, relatively speaking 2008 was a pretty darn good year -- both worldwide and personally. My wishes that your 2009 be at least as good as 2008 and no worse. If these wishes are fulfilled, you will have a great year. Happy New Year, andy t. a.

Sorry, my misreading. To my knowledge and depleted reading ability, there is no such specific provision in the code to treat contributions as "not yet made" because they hadn't been deducted. However, 404(a)(1)(A) contains "as determined under regulations prescribed by the Secretary" numerous times. So, perhaps this is the license to apply the old reg. Agreed, there is no reason to believe that if you didn't deduct a contribution that the opportunity would be lost. Best holiday wishes, andy t. a.