tymesup

A quick perusal of the thread on the other board didn't have anything encouraging on the interpretation. My guess is unless somebody pressures the feds, there won't be any further guidance. Not that guidance now will help anybody, unless it's an extension of some sort.

IIRC, another board suggested there could be times when you are forced to overfund a plan, based on PPA's own assumptions. I wish I still had some of those magic beans.

I'll admit, I don't understand this, either. We don't have many, if any, EOY vals, as luck would have it. The folks on another board are interpreting this to mean you can't use a 12/31/07 valuation for your 10/1/08 AFTAP. They are not a bunch of happy campers. A couple of mavericks have declared they're doing it, anyway.

Some folks on another board were under the impression guidance would be issued before the Labor Day weekend, which didn't happen. Whatever approach you decide to take, you will probably have company. My guess is that any reasonable approach will work. Cooler heads will decide that enforcement on this issue is a non-starter.

I agree the Rev Ruling does not address this particular situation - freeze, new plan established, no merger. Under Law and Analysis, the second paragraph says to generally count all years of service for vesting. It then provides an exception for any period when the employer did not maintain a predecessor plan. The Rev Ruling clarifies that a freeze/partial termination does not mean that a plan was not maintained. The question then comes down to whether the frozen plan is a predecessor plan. Agreed?

Note that 2003-65 is on the current syllabus and, I assume, was on for May 2008. Here is the last sentence of the HOLDING: If, instead, the accruals are earned under a new plan maintained by the same employer and the new plan is merged with the frozen plan, then this holding also applies, so that, after the merger, service after the frozen plan was established must be taken into account for purposes of vesting in any benefit accruals under the new plan. Note the Holding says service after the frozen plan was established must be counted under the NEW plan. My interpretation of 2003-65 is this: 1 - If you terminate a plan, you don't have to count years after a termination 2 - If you freeze a plan, a partial termination has occurred - a different animal than a termination 3 - Therefore, you still have to count years after the freeze/partial termination The Revenue Ruling could have addressed the test scenario - frozen accrual, new plan, no merger. Instead, they chose to save paper, just as they are now doing with regulations under PPA. AndyH, I think your appeal will be denied, but there's little harm in trying, sure beats studying again. Good luck.

Grant that 1/100 isn't a big jump, there must be folks on the cusp. I got a 5 on Exam M where I'm pretty sure one more question (out of 40?) would have pushed me over. There was a guy on one of the other boards who got 5 or 6 consecutive 5's - he said, they should determine the passing grade by just adding one to my score. Have you run this question past Rick G?

From the Joint Board website: "In preparing the examinations, great care is taken so that each question has one and only one correct answer based on the data given. Each question is reviewed by all members of the Advisory Committee on Actuarial Examinations and by representatives of the sponsoring organizations. Nevertheless, because mistakes can occur, a request for consideration of an alternative answer to a given question, or for disregarding a question, will be entertained by the Joint Board but only under the following conditions: An appeal must be made in writing and postmarked not later than six months after the examination was administered. The appellant must describe in detail the fault found with the question and an alternative answer if one is claimed. In the case of claimed ambiguity, credence will be given to an alternative interpretation only to the extent that such interpretation is one that might be reasonably made and is not strained in the light of attendant circumstances. This policy is of positive benefit to most candidates; otherwise, it would be necessary to burden each question with numerous qualifications and stipulations that the qualified practitioner does not require and which would make the question more difficult to read." I'm assuming grades have been issued. Changing a true/false question will result in a whole bunch of additional passers, not a happy result for the Joint Board. (Sorry, I edited this by mistake instead of replying). I'm doing my best to restore it. AH

Other pr issues - What about the missing year? What was wrong with the old plan? Why is money going into the old plan? Why isn't money going into the old plan? Why am I getting two SAR's? On the plus side, you might be able to increase fees to that sponsor by 10%.

Got you beat on the exam route. Passed SOA Part 1 in 1978 and Exam M in 2006, 28 years apart. May get around to Exam C in May 2009. Good luck with your exams. Would never have guessed you're not an EA, you're one of the folks I respect around here.

Many of these Schedule C sponsors won't be covered by the PBGC, also.

They were able to produce 132 numbers but not 158?

http://www.actuarialoutpost.com/actuarial_...p;highlight=415

There may very well be an account with 170K in it, which Dr. Doctor may even be directing. Heck, if he's a Trustee, who's going to stop him from distributing these assets? I once inherited a DB plan with three owners in it who were putting in the same amount because the Individual Aggregate normal costs were the same. When Ms. Old Owner left, she took 1/3 of the money - about 200K. Because she had two extra years of accrual by the time she left and 417e rates were much lower than the valuation rate, she was entitled to something north of 800K. Maybe we should put her in touch with Dr. Doctor.

Any possibility they allocated the total contribution by compensation? And/or funded 150% of the Funding Target?

I'm trying to get us subscribed to TAG. In the meantime, I'm finding that Tripodi has some good stuff.

For what it's worth - Tripodi 2008, p 5.80: Actuarial adjustments to the grandfathered benefit. Although the regulations do not address this issue explicitly, Treasury personnel have acknowledged that the grandfathered benefit, to the extent it is less than the actual average compensation of the participant (without regard to the IRC 401(a)(17) lmit), also may be actuarially increased for late retirement. For example, if the participant's actual average compensation is $400,000, additional actuarial increases in the grandfathered benefit could be made, provided that the annual benefit payable to the participant in any later year does not exceed the lesser of $400,000, or the applicable dollar limit under IRC 415 (b)(1)(A) that is in effect for such later year.

Sorry about that, I have to trip on annual/monthly once in awhile.

If his high avg comp was 38,113, why would it decrease to 18,750?

Does the plan termination deprive the helpers of the chance to grow into the subsidized early retirement? Would they get the subsidy anyway? Is it likely the helpers will make it another seven years, given the doc seems to have gone through at least one set of predecessors? Does a4 limit what this is trying to accomplish, anyway?

ASPPA Journal, summer issue, interview with Joyce Kahn, excise tax under 4974 for 401(a)(9) violation - "In the case of employees other than 10% owners, if an employer requests it, we automatically waive it. In the case of a 10% owner, then we need some justification ..."

I had a plain vanilla unit formula that was giving me a variety of accrual rates because average comps were changing. We took the view that a 1% plan was a 1% plan, regardless of the difference in the accruals. This seemed to be consistent with the language in the a4 regs. If only I could have hit the curveball, I wouldn't have to deal with these curveballs.

Sex and age change operation We were just talking about having an assumption for sex changes, plus another two mortality tables. How is this going to affect your NRA? 401(a)(9)? 415 limits?

Our friend PPA makes this question go away. Andy, what's with the avatar?

1 - Do you want to leave your client at the tender mercies of the IRS? Get your ducks in a row now. 2 - He doesn't have to terminate at 55. However, you would be making a bad situation worse by not terminating, assuming there is no possibility of higher average compensation. If you're going for a determination letter, start the process early.