eeyore

Yes, WEP can apply to a governmental DC plan. I assume you are familiar with the rules if the governmental employee only participates in a DB plan. If there are two or more plans, the WEP applies to the primary plan, almost always the DB plan. In this case, the DC plan is ignored. However, if the employee only has a DC plan, the WEP rules apply to this. Once the employee takes a distribution, the balance in the DC plan is converted under the WEP rules to an equivalent annuity, and this is used to determine the WEP offset. Note: if the employee does a rollover from the governmental DC plan, that counts as a distribution for the purposes of the WEP. Employees should think carefully about this. If they don't need to take distributions to cover living expenses, they may be better off leaving all the funds in the governmental DC plan, since this will delay the application of the WEP offset.

I'm not an attorney, but the ERISA sections dealing with fiduciary issues are generally not applicable to governmental plans. This question may fall under NJ law, if that concept is not an oxymoron. (Mandatory Sopranos reference.) Are investment choices in this plan set by statute? If not, is there a NJ statute governing the duties of fiduciaries? If trustees weren't sued about this by participants in 2008/2009, they can probably sleep soundly.

Andy, 13th checks, in my experience, are most often granted by the legislature, city council, or other governing body without regard to an "excess earnings" calculation. For example, if a plan has no automatic COLA, a 13th check may be granted from time to time. (Think of this as an alternative to granting an ad hoc COLA.) When granted, the governing body is aware that they are creating an additional liability, but they believe the plan is strong enough to justify this move. The amount of the 13th check is usually equal to one monthly payment, but it could be determined using some other approach, reflecting service, years retired, or other variables. The "excess earnings" approach is used in some plans to determine the COLA as opposed to a 13th check. I've seen a survey saying there are 5 statewide retirement systems using this approach. These can be more sophisticated, involving cumulative earnings in excess of some amount over the assumed return, rather than just looking at the excess over the assumed return. I think "excess earnings COLAs" are all flawed, and I always tried to discourage their use. The upshot is that the two things--"excess earnings concept" and 13th checks--are logically independent although they were both used in Detroit. There are plans that use the excess earnings approach to determine a COLA, but that don't grant a 13th check; and there are plans that grant 13th checks without considering the earnings.

Some states do have bodies that maintain lists of all the governmental plans in the state. For example, there are the Texas Pension Review Board and the Florida Department of Management Services. Also keep in mind that many states have a single state-wide plan that covers most or all municipalities and school districts.

I think you are getting the old run around, though it may be due to internal red tape as opposed to animus. You should press Boeing to provide you with two estimates: (i) if commenced by you December 1 (assuming your husband hasn't died before then), and (ii) if your ex-husband dies next week and yoyu start benefits on December 1. This is information they should be willing to give you. You might find the amounts are not very different, but then I haven't seen this QDRO or the plan terms. If pressing them doesn't work, you will need an attorney to do it for you.

There are a few state and local governmental plans that still treat member contributions as after tax. I've seen this in some public school districts. More importantly, even in plans that treat member contributions as pre-tax under IRC 414(h)(2), all contributions made prior to ~1983 are after tax. Therefore, the original poster has to get a breakdown between pre-tax and post-tax contributions from the plan administrator. (The ~1983 date is whenever the plan adopted treatment under 414(h)(2).)

CM = Census Mortality. This was a table based on the 1990 US Census. (To verify, qx at 37 = .001969.) I wouldn't use it for a pension valuation, although I haven't compared the q's with a more standard table to see how different it is. It's a unisex table for one thing. The original research is here: http://www.cdc.gov/nchs/data/lifetables/life89_1_1.pdf. The life table is on page 12 of the document (labeled as page 6).

As noted above, there are legal/regulatory issues you will need to consider. However, if your goal is to reduce costs by encouraging employees to work longer, I want to caution you that this may not work. Presumably, there are already some employees working beyond 55/30. In my expereince, it has been difficult to construct realistic retirement patterns under the new design that would offset the cost for those already working longer careers. Keep in mind that your proposed sweetener is a fairly mild incentive, and won't change behavior significantly.

Andy: I think you misunderstood the form of payment. If the formula produces $1,000 life annuity, then option will be adjusted, say to $970 or conceivably to $1,030, depending on the ages. Then this amount would be payable while both parties are alive. Upon the first death, the amount paid would be reduced to fraction X amount that had been paid. This is a perfectly reasonable option, especially when the fraction is 2/3 or 75%, on the grounds that living expenses for the survivor will reduce upon the death of one member of the couple, but generally they won't go to half. I saw a lot of plans where this form of benefit was offered as an option, but was never the qualified J&S form. At 50%, it is as you described (but with an adjustment for the ages), and at 100%, it is identical with a standard J&100%S.

I've seen some large governmental plans allow the recipient to voluntarily suspend payments, but it strikes me as very bad public policy. Is she able to work? If so, she could return to work and the benefit might be suspended due to that fact, depending on plan language. But of course then she wouldn't qualify foir assistance because of her employment income. Catch 22.

You need an attorney for this. I would not be surprised if you do owe this to her. Under the divorce agreement, your ex was suppose to get $400 from each of your retirement checks. That isn't happening; you are presumabley getting the full benefit, including that $400/month. Most divorces and DROs that I have seen make the participant liable to pay the ex if the plan does not pay her. I am an actuary, not an attorney, but I think you should be prepared for bad news. And yes, I understand that it is frustrating since your ex and her attorney have dithered arounbd for years.

The test is more complicated than just FICA pay, but for an employee with a typical non-governmental job, FICA is what you want. Therefore, the test is on the full $30,000 in your example. My source is an old Social Security Handbook (circa 2003). This won't have changed, however. The earnings test, with minor exceptions and exceptions for certain governemental cases, is based on "wages for employment covered by Social Security". This in turn is defined as including amounts deferred under a 401(k) plan.

So in 9 days, we learn the answer to Life, the Universe, and Everything!

I'm confused. How does anyone take a "loan" from a DB plan? Was that a typo?

GFOA has some material that might be helpful for a newbie to this field. Then there is the Governmental Plans Answer Book, edited by Carol Calhoun, the moderator for this board.