tymesup

The zeroes count in determining whether the plan is covered by PBGC. They don't count for the flat premium.

If the plan's early retirement benefits were subsidized, adding a (non-subsidized) lump sum could lower the plan liabilities.

Rettig v PBGC appears to have required PBGC to recognize the ERISA mandated vesting provisions as fully phased in: http://openjurist.org/744/f2d/133/rettig-v...nty-corporation Page/Collins, in 1995, refers to Rettig and Piech, so it appears PBGC did not trump the appeals court's decision in Rettig: http://www.lostpension.net/PAGE.PDF

If you allow participant direction in a floor offset, participants may decide to invest in high risk alternatives. Heads they win, tails the DB plan makes up the difference.

One of my old firms screwed this up royally once. Another actuary caught us. Luckily, he didn't know how to do it, either. We screwed this up a year ago, too, although it was moot. If I were writing the Code, there would be two tables that applied to all plans. One is the dollar limit at all ages, updated annually for indexation. The other is a table of lump sum factors at all ages. The only calculations needed are pro-rating for participation and compensation and compensation averaging for three years. Simple to apply, equitable for all plans. Excuse me, they're paging me for Room 101.

We had a couple of these surface recently. Here's what we did: 1 - Determine lump sum under plan actuarial equivalence 2 - Determine lump sum under 417(e) 3 - Take greater of 1 and 2 4 - Determine dollar limit at age 52, using worse of plan factors or 5% * 5 - Determine comp limit 6 - Take lesser of 4 and 5 7 - Determine lump sum of 6, using worse of plan factors or 5.5% **, *** 8 - Take lesser of 3 and 7 * - Plan can be amended to increase benefit ** - Plan can be amended to increase benefit *** - 105% prong does not apply to "small" plan

Participant turned 70.5 in 1997, the same year 401(a)(9) was changed so that deferred retirees got actuarial increases and continued accruals. The plan was amended accordingly in 2003, retroactive to 1997, within the remedial amendment period. The plan was terminated by the PBGC in 2004. The PBGC determined that this was a benefit increase and that it was 0% phased in because it was adopted less than a year before the termination. Anybody run into this situation or have any thoughts? Thanks.

thanks, rw

Participant received distribution in 2009, wants 1099-R issued now. Relius software appears to issue only 2008 Forms. How would you handle this? Thanks for any help!

I think the only sensible approach is determine the minimum, determine the quarterly, determine if you satisfied the quarterly requirements. Since you don't know what the quarterly is at the time it is due, you don't know whether you made it, you don't know whether the employer missed it on account of inability to make it, so you make a meaningless disclosure to the PBGC. PPA, the gift that just keeps on giving.

Pasted from another board, probably from 401(a)(26) regs (iii) Defined benefit plans with other arrangements. (A) In general. A defined benefit plan is treated as comprising separate plans if, under the facts and circumstances, there is an arrangement (either under or outside the plan) that has the effect of providing any employee with a greater interest in a portion of the assets of a plan in a way that has the effect of creating separate accounts. Separate plans are not created, however, merely because a partnership agreement provides for allocation among partners, in proportion to their partnership interests, of either the cost of funding the plan or surplus assets upon plan termination. (B) Examples. The following examples illustrate certain situations in which other arrangements relating to a defined benefit plan are or are not treated as creating separate plans: Example (1). Employer A maintains a defined benefit plan under which each highly compensated employee can direct the investment of the portion of the plan's assets that represents the accumulated contributions with respect to that employee's plan benefits. In addition, by agreement outside the plan, if the product of the employee's investment direction exceeds the value needed to fund that employee's benefits, Employer A agrees to make a special payment to the participant. In this case, each separate portion of the pool of assets over which an employee has investment authority is a separate plan for the employee. Example (2). Employer B is a partnership that maintains a defined benefit plan. The partnership agreement provides that, upon termination of the plan, a special allocation of any excess plan assets after reversion is made to the partnership on the basis of partnership share. This arrangement does not create separate plans with respect to the partners.

Assuming the two new employees are NHCE's, the plan calls for the projected benefit. I don't believe this death benefit is protected under 411(d)(6), so the plan could be amended to provide a lower amount. If the owner is happy with 50x, you could cut everybody back to that level. You want the amendment in place soon, so you don't have to purchase 100x and then cut these two back. The agent is not going to be a happy camper.

Does the AAA require Core credits like the JBEA? AAA credits are easier to receive than JBEA credits, in some cases. If you do EA and post-retirement medical work, do you need 30 + 30 credits? Or maybe you can double up on some of the credits, like ethics.

You could have a problem if the employer is deliberately holding the employee's hours under 1,000. For example, the ee is at 999 hours and the er says, take December off. Presumably, the plan has a 1,000 hour requirement.

Can new loans be eliminated from a plan, prospectively? If so, is a 204(h) Notice required ahead of time? What would you do about existing loans? Thanks in advance for any help.

Hold on there, Mr. I'll check Benefits Link until the Belmont starts. IIRC, single women live longer than married women, while married men live longer than single men.* If they're splitting up in the late 50's, that would lower the female q's. Perhaps there's a delayed effect operating here. *It's actually the same life expectancy, it only seems longer.

So, it's a sunny Saturday afternoon and I've got nothing better to do but look at RP-2000 q's, projected to 2008. For the ages from 54 to 61, the girls are dying faster than the boys. Anybody ever notice this? Does this make sense?

Suppose last year's AFTAP was 85% and gets presumed down to 75% on April 1st. The sponsor sends the required notice of the restriction. The sponsor provides data to the actuary, the AFTAP is back up to 85%. The sponsor sends the optional, morally required notice that the restriction is lifted. Repeat for a few years. Mix in a 95% presumed down to 85%, followed by an AFTAP of 75% to confuse the participants and administrators. Sweet!

We had an attorney look at this years ago. He reached the conclusion that a partner could make a one-time irrevocable election with respect to the partners' plan, now get this, when the partner was first hypothetically eligible for the partners plan. Specifically, if you were hired as an associate, you had to make this election when you satisfied the age and service for the partners plan, even though you were still an associate (and had no idea when you would make partner or what partnership would look like).

Old 404 didn't provide for choice 1; it was allowed under the old 404 regs, which have not been rescinded. If choice 1 is no longer permissible, then sponsors that used it have a year without a deduction. If this was Congressional intent, they can bloody well tell us. If IRS thinks this is how 404(o) works, they can bloody well tell us. We are taking the conservative position that we can't add interest to the end of the fiscal year for the maximum deductible contribution, so we're not totally sure the old regs apply. In other news, we found that by orienting half of the angels in an upside down position, we can increase the number that can dance on the head of a pin by 24%.

Is such a lump sum permitted under the qualified plan? If this is a payment under a QP, we don't care what the insurer wants to do, only what the plan permits. The benefit is not under the qualified plan. Now that you mention it, a Relative Value Disclosure would state their assumptions and make life easier. I figured this was the best place to find some helpful actuaries, which has been reconfirmed.

I'm hoping the client is just satisfying herself that the offer is reasonable. The insurance company took their time granting her claim; she's under the impression they are shaky financially. If a half-wit is quartered, is the end result an eight-wit?

for what it's worth: http://en.wikipedia.org/wiki/Lyme_disease One of the studies referenced had 100 subjects for 180 days. While there were "adverse events" (including a life-threatening pulmonary embolism), nobody died. While it's a small sample, this agrees with the notion Lyme isn't a fatal disease. On the other hand, they do compare late stage Lyme to congestive heart failure. Deer contribute to the spread of Lyme, another plus for an animal that is either loved or hated. Guineafowl may be an effective controller of the ticks. Borrelia is a 14% Scrabble word; now I know what it means.

A client is scheduled to receive disability payments for the next twenty years. She is being offered a lump sum as an alternative. The CDC Report and a Lyme disease website have counts and rates of the diagnosed cases for various periods and states, but not deaths. Even these figures are questionable, since it's frequently unreported and/or misdiagnosed. I tried running numbers with the RP-2000 tables for disabled and healthy females. The q's are between 7 and 3 times as large; the annuities are about 10% lower; the difference between 6% and 8% interest is 15%. It will be interesting to see what the insurer has offered and her estimate of the interest rate. I suspect she's going to take the lump sum, since she doesn't trust the insurer.

Lyme disease is rarely fatal. Since it affects people's health adversely, however, it must affect their mortality. Does anyone have ideas how to approximate this effect? Thanks for any help!