tymesup

I wouldn't be comfortable using IA over 20 years if the benefit is accruing over the first 10. Note that IA generally funds faster than the benefit accrues.

tagdata RRs go back to 1959 their GCMs go back to 1977

We've been using individual aggregate funding and assigning the normal cost to each partner. Holding my nose helps a little. We're converting some of them to cash balance, so we at least have a stationary target to hit.

Note that small plans only need 15 days lead time for a 204(h) notice.

IIRC, 204(h) notices were not required when PBGC factors changed to GATT. Perhaps they will treat this the same way. We should probably be telling our clients about this change in any event. Further, some of them will want to inform participants even if it is not required.

I'm surprised to hear the term "immunization" associated with such a small group. If this investment counselor actually has something that will track PPA liabilities, I would be interested in talking to him. I just don't see how it's possible.

Where did the "6% PS" come from?

We're generally using conservative assumptions, so we should generally be OK with the change. We would like to move most or all of them to BOY valuations to get more lead time on amendments and funding. We haven't figured out what to do with some of the EOYs - cross-tested plans, 25% of comp, sole proprietors. The freeze/unfreeze concept may not be "definitely determinable" or "permanent plan" enough for us. The two year wait for increases is definitely a problem.

IIRC, the PBGC "logic" was that a terminating plan required the change to GATT rates. However, it could have grandfathered PBGC rates. Therefore, the PBGC did grandfather PBGC rates after the plan terminated but before it amended for GATT. It's not clear to me why they were treating a terminating plan differently from an ongoing plan. I don't know if this issue was resolved.

I had a charity that credited service with other local branches. Their wrinkle was to carve out the benefit from the other branch so the service wasn't double counted. Some folks moved multiple times so there were carve-outs of carve-outs and adventures in data.

By "projected earnings assumption", I assume he meant salary scale. Some folks use the building block approach to setting their actuarial assumptions. For the discount rate, you would have pieces for the real rate of return for a risk-less investment, a risk premium and the rate of inflation. For the salary scale, you would have a productivity rate and the rate of inflation. Since the rate of inflation is in both assumptions, they are related. You might argue that the real rate of return and the productivity rate are related, as well. Under PPA, the feds are setting the assumptions for us, to a large extent.

"Except that within a DB plan they all have to be Whole Life." I believe they can be universal life or term life, as well.

The policies should also have similar features. For example, whole life for the owner and term life for the employees could be a problem.

Discrimination, PS 58 costs and the size of the policy are possible issues.

Doctor N is getting a Hypothetical Employer Contribution from cash balance Plan S. Does he get credit for a year of participation for 415(b) purposes? If not, is there some minimum that would start the clock? Thanks for any help.

I don't see a way the limitation is ever less than 31%. If there's no DC, you get the DB minimum. If the DC is under 6%, you get the DB minimum. If the DC is 6% or more, you get 31%.

I think it was Norris and Manhart that brought us gender neutral mortality. Now that we have relative value disclosure, we are misleading participants by using neutral tables. I suppose it's even worse when we get spouses of the same gender for J&S benefits.

I think you needed to adopt the plan before the end of the short plan year ending 6/30/07. Perhaps there is a Resolution to adopt a plan that you haven't seen yet. If the plan does have a short plan year ending 6/30/07, you would be exempt from quarterly contributions for that year. Therefore, your minimum funding is due 8 1/2 months after the plan year end, or 3/15/08.

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You're welcome. The past service credit is more typically used for a new plan with an old employer. This situation may depend on the particular reviewer if you go for an FDL or get audited.

Yes. Did anybody work while the DB was frozen and leave before it was thawed out? Perhaps there's a Fresh Start somewhere in the document? We needed to do something similar where Fresh Start was helpful.

We've been issuing the notices at the same time as the SAR. I think there's a 100 or 110 per day (per participant?) penalty if late, so we took this seriously. Can't find the reference in ERISA/regs at the moment.

I'd be concerned whether the amendment is discriminatory.

All plans will be 100% funded, proclaimed PPA. And all was well. Since the 2008 quarterly depends on the 2007 fundedness, there should be ample lead time, particularly with BOYs.

For the EOY vals, it would appear that decrements are not needed, unless you had a subsidized early retirement benefit or something like that. It's not clear that EOY vals have much future. For the BOY val, I guess it depends on when you assume your decrement occurs. If it's after the benefit accrues, it has no effect. Maybe the decrement should be halved?