SoCalActuary

Senate version makes the 5.5% permanent.

http://finance.groups.yahoo.com/group/Coll...uaries/messages This is the reference from the www.collegeofpensionactuaries.com web site, under the heading of "List-Serve" The board is fuly accessible to registered members. As a non-member. you will not be eligible to post.

Those are included at the option of the user. But consider such things as subsidized early retirement, like "30 & out", which I don't see in the ASC non-discrimination test.

I use ASC for multiple plan cross testing some times. You have to be careful about the parameters and the use of multiple cases. Either use SSN's in both files to match them up, or have no overlapping employee records. The results do not appear to handle subsidized early retirement to my satisfaction, but if they are ordinary designs, you can get it completed. I still prefer Datair for the small plan tests. Others tell me that Larry Deutch has the better system for this purpose.

"Current and prior year deferrals" to me means all prior years, not just the immediate prior year. The IRS should be giving you examples of this, so the intent is clear.

Yes, no, you're welcome! Seriously, the annuity purchase relieved the plan permanently of the obligation. The insurance company will be the payor, so they issue the 1099R. Also, no SSA form is required, unless the annuity contract is not permanent. If it can be reversed, or if a lien might be needed because the plan is underfunded, then my position changes.

Thanks for making this poll question. I believe you could defend a lump sum payment today on the basis of the law now in effect, using the 417(e) interest rate. But do it quickly, because Congress could quickly take it away.

Have you noticed that we have a discussion forum on plan investments?

Unless he has effective control over the non-profit also. If he does, then the rules change.

It all sounds ok. Just be prepared to demonstrate that the new options are at least as valuable as the old ones.

There may be a short window of opportunity to get higher 415 lump sums between the time of Jan. 1 and passage of new legislation. But I expect that the 5.5% rate will become a permanent part of the IRC. Will it be amended retroactively? Will the House pass a bill before the 12/31/05 expiration? Stay tuned.

I have operated on the rule that the old options must remain fully enforced on the accrued benefits of existing participants. However, you can change them prospectively to provide the greater of: A. The accrued benefit after any future accruals on the new conversion factors, or B. The protected accrued benefit on the old options.

In our first year of existence, the College of Pension Actuaries has already: 1. conducted an interesting and extensive message system for our members to pursue actuarial discussions 2. developed important links to information and tools for practicing actuaries 3. presented thoughtful comment on significant regulations 4. educated members on new legislative and FASB developments 5. started planning for our first educational program strictly for enrolled actuaries Our intent is to be inclusive and open-minded to members of this profession, using the talents of our volunteers to help each other and the pension community.

Probably a good idea for sheltering part of manager's income. One employee is probably a key employee, depending on income and status as an officer. If there are other employees, you must include at least one other when they become eligible. The three foreign owners are just llc members treated like stockholders, and not employees.

There are two issues to consider: First, IRS & California Franchise Tax Board are targeting non-profits that play with pension funds. Get the latest news on this before you comment to your plan sponsor. Some of this also is reported from the LA Times articles on the LA County pension funds. Second, the credit unions are subject to internal and external audits. They probably have not funded their pension plan fully in part because they have minimum net worth requirements. How would the proposed solution change their audited financial statement? Church plans do not have a firewall, as they are exempt from ERISA regulations if they so elect. But I don't find anything that extends this reasoning to general, secular non profits.

http://www.irs.gov/pub/irs-pdf/p3998.pdf is the IRS web link for describing new retirement plans. In addition, you have the published info from the pension answer book, IRS Pub 560, NIPA & ASPPA text materials. In part, your explanation depends on your audience. Do you want to talk about the funding rules, the benefit accruals, the deduction limits, the use of a combined pooled trust fund, the PBGC guarantee? Good luck authoring your marketing piece on db plans, and I hope you sell a bunch of them.

Good point. But plans with over 500 lives can use an EA's certification that the values on plan funding assumptions are less than plan assets, so they don't always use the 83 GAM tables.

Thanks for the summary. The questions that arose are: 1. can we exclude only some of the HCE's as a document provision? 2. do the HCE's that are included have to get 100% vesting? I feel comfortable with #1, but not #2.

Interesting issue: PBGC premium is based on the actuary's choice of mortality table for funding. If the funding assumption uses a load, is this required for the PBGC premium? My guess is "no" subject to the agreement of the PBGC actuaries. But this could get twisted easily. For example, a reasonable annuity rate is $140 per dollar of monthly benefit at age 65. If I used a "die-tomorrow" table that produces $100 per dollar of monthly benefit, then add a 40% load, I get the reasonable annuity rate. But I have really reduced the PBGC variable premium liability if the load is not used there.

If this was a DB plan (which this forum covers), then the $41,000 would be possible with no problem. If this is a DC plan, then one participant gets more than 25% of pay contribution. This may be ok if the plan has cross-testing and there are enough other participants getting less than 25% of pay.

For 2006, a plan wishes to use the safe-harbor match formula, but with two exceptions: 1. 3 Key employees (all HCE's) get no match 2. All other HCE's get the safe-harbor match formula, but subject to vesting. The plan is not top-heavy. Does this exempt the plan from 401k/m testing?

You might get away with it, but I doubt it would survive an IRS actuary's audit. I would add a provision to include a minimal additional benefit for the spouse.

If you have a frozen benefit with extended wearaway, you can index the prior accrued benefit under some situations to use the $205 k , (now 210 k), on the frozen benefit. Otherwise, I agree with method 1.

You could also fix by using the entry date retroactively to the beginning of the year.

The source of this mix is found in the rules for incidental death benefits. See RR 74-307 for the original reference. If the 50% for insurance is in whole life policies, I believe you would comply with the incidental death benefit rules. If you are using variable life, universal life, or term products, you have a different answer. However, this is just a starting point for your own research.