mwyatt

Well, they released the SAR program today, but... Install on first computer went ok. Second computer, the uninstall of the 2006 version bombed and then completely hosed the computer. Am now in the process of wiping and reinstalling XP from scratch. Buyer beware... Had some similiar problems with the 2007 Government Forms process. To put it mildly, am not too impressed with the programming changes occurring at our friends in Jacksonville.

Don't have the regs handy, but the key point as far as comparing is that you can use as your basis point the SLA if this is also offered to married participants. Even if you want to go with backing the 417 lump sum to the equivalent QJSA using the 417 interest and mortality assumptions rather than the plan's interest and mortality assumptions, in a flat case unlikely that the 417 QJSA would be radically different (you have a 95-105% window to state that they are approximately the same).

Actually had this discussion today with a plan lawyer, and you can compare to the straight life annuity for marrieds, as long as this isn't verboten to married participants. So in a "plain jane" plan (no subsidies), all of this hooplah, including lump sums, boils down to 100%.

Software has been released on the website as of 1/13. SAR not yet out. I will provide a word of caution. I updated my computer, leaving 2006 version in place, no problems. However, the next three computers that I upgraded, I deleted 2006 version in the course of installation (option presented to you in the install routine). Software went through installation, but upon rebooting, computers were mildly hosed, to say the least. Seems the 2006 version uninstall trashed a DLL file (atl.dll) that should be in the c:\windows\system32 folder. If you have problems (and you'll know because you will start getting strange error messages and you can't open most windows programs) that's the culprit. Do a search for ATL.DLL (or get a copy from another box) and just copy it back to c:\windows\system32. Did report this to Relius. Caveat emptor...

So it sounds like last year with the interest rate issue, in that valuations for the most part can be run to determine the contribution ranges (assuming that CL doesn't factor into the equation), with possible revision of the CL results later in the year if these tables are adopted?

Just starting to get requests in for 1/1/2007 beginning of year valuations. Have the following questions: 1) 2006 valuations used the 1983 GAM and GAF tables for current liability. Are these tables still in effect for 2007 valuations or do we switch to more recent tables (ala the 417 table switch from 95-6 to 2001-62). 2) Similar question on mortality table to use for PBGC variable rate premiums for 2007. Any other things we should note for 2007 valuations?

Thanks for the input. Looks like a little database coding is in order... (a heckuva lot better than having someone run Relius Documents nonstop for 2 weeks).

Get Adobe Acrobat (and or some other PDF file creator).

Our volume submitter provider is recommending that all of our clients sign the Form 8905 by 1/31/2007. Don't have a problem with that, as they have provided a Word version of the form via their website. The info actually entered on the form is relatively trivial (plan name, EIN, plan number, and plan sponsor). However, in order to produce these forms using their document software, we have to open up each plan, update it to the newest version of the language, and then build and print the form. Seems pretty time consuming for 800 plans, especially for what is essentially a nonbillable item. My thought last night was to print out a raft of the partially prepared 8905s, and then using our existing database prepare a blank report page with the items lined up on the form. Then just a matter of loading the printed out forms, and then printing the database job. Estimate this would take a 2 week process down to about 2 hours (from experience of updating 500 SH 401(k) plans in November to generate the new SH notice). My only question is that the form itself has those annoying boxes to individually enter each letter. I am not inclined to parse each item character by character to exactly line up; rather just align with the start of the line and let the characters fall where they lay (I've got better things to do with my time around the end of the year). Given that these are just retained forms, not sent to the IRS, does anyone think it a big deal if the characters don't perfectly line up on the 8905?

"I appears that the organization that I work for has been taking the RMD out of after-tax balances..." Can you clarify this a bit? Andy's correct in that RMDs are not subject to the UCA '92 mandatory 20% withholding. Just remember that withholding and taxes due are two different animals.

You have incorporation date of 6/1/06, which makes a 1/1/06 effective date a little questionable on the face of it.

98%? Generously low; I've yet to see an annuity contract purchased in 23 years in the small plan market where lump sum is available .

PPA.

PBGC has also provided the revised premium interest rates: Revised premium rates

The minimum lump sum is also coupled with the 1994 GAR table (IR RP 2001-62), so your comparison is the lump sum using your specified AE assumptions v. the applicable 30-year UST rate and the 1994 GAR table. Differs in that the pre-GATT calcs used your AE mortality and the PBGC interest assumptions for minimum lump sum purposes.

Haven't seen anything yet, but I assume that the IRS still has this data. A point of formality maybe, but release may be tied to Bush formally signing the bill before actual release. (Best guess for Jan '06 PFEA upper CL limit - 5.75%?).

[PPA] SEC. 405. PBGC PREMIUMS FOR SMALL PLANS. [PPA §405] (a) Small Plans- Paragraph (3) of section 4006(a) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1306(a)) is amended-- (1) by striking `The additional' in subparagraph (E)(i) and inserting `Except as provided in subparagraph (H), the additional', and (2) by inserting after subparagraph (G) the following new subparagraph: `(H)(i) In the case of an employer who has 25 or fewer employees on the first day of the plan year, the additional premium determined under subparagraph (E) for each participant shall not exceed $5 multiplied by the number of participants in the plan as of the close of the preceding plan year. `(ii) For purposes of clause (i), whether an employer has 25 or fewer employees on the first day of the plan year is determined by taking into consideration all of the employees of all members of the contributing sponsor's controlled group. In the case of a plan maintained by two or more contributing sponsors, the employees of all contributing sponsors and their controlled groups shall be aggregated for purposes of determining whether the 25-or-fewer-employees limitation has been satisfied.' [PPA §405] (b) Effective Dates- The amendment made by this section shall apply to plan years beginning after December 31, 2006. Now this isn't quite the relief initially indicated in the ASPPA summary, but still will help out. I have a 2 person plan that we calculated (on 3.95%) a variable rate premium over $1,000. So a cap of 2x5x2=$20 sounds pretty good to me, considering that there is exactly a 0% chance of PBGC ever having any exposure at all in this case. Too bad that this won't take effect until 2007.

I know it's a tougher slug at 386 pages (but not quite as bad as all 1,010 pages of the actual bill), but the Committee report I first linked to is pretty helpful and organized pretty well. The ASPPA link serves as highlights. Also came across this html version of the bill from the Pension & Benefits Blog which is pretty handy: http://fuguerre.googlepages.com/PPA.htm

ASPPA has a decent summary here: http://www.asppa.org/government/comment08-02-06.htm Like the PBGC stuff down below ($5 cap on variable rate premium if under 25 lives).

Appears this will be signed. Here is a link to the Committee Explanation of the provisions: http://www.house.gov/jct/x-38-06.pdf Does appear, looking at page 181 of the Committee, that the high 3 year issue for 415 purposes is resolved in our favor (goes back to all service, rather than participation service). Funding rules for 412 apply to 2008 plan years. Any other observations at short notice?

The particulars are that a client of ours has their daughter buying into their business (more than 5% stock purchase). She is married to her partner under Mass Law, who will also be working for the business. Remember from an '04 EA meeting session (from the mouth of Jimmy Holland no less) that under Federal law, same-sex marriages are not recognized. Questions abound in our state (and no, I don't want to get into any discussion of pros-cons of same-sex marriage, just want some answers to pension questions). 5% Owner attribution: if not "married" under Federal law, then IRC 318 attribution shouldn't apply to the partner - so not an HCE by stock attribution. Yes or no? This is a 401(k) plan and ADP testing is an issue. Many other questions abound (beneficiaries, etc. and the quirk in MA law that contributions for "owners" aren't deductible on the State corporate return - would MA have differing attribution than the Feds), but this is the first thing that comes to mind. Any others out there had to think this one out?

The issue is not limited to DB plans - fundamental problem is there aren't a whole lot of folks clamoring for the lucrative 1k-5k rollover business, as you would suspect.

Checked out the site; BTW what's a "law frim"?

On a side tangent... What if benefits go to an IRA rollover account, then down the road payments start. Did CA et al ever figure that one out or did they just focus on payments from companies' plans domiciled in their state?

Watch out for those Google spiders...