Grendel77

So the sponsor's EIN is listed on the 5500. The Plan's EIN is listed on the premium filings. On the premium filing, there's a question that says, (not verbatim): If the EIN or PN on last year's 5500 is different from what's listed here, report the EIN and PN that was on the 5500 and explain. I've always left that blank, because my pea-brain always interpreted it as "if the plan's EIN is different on the 5500...". So now the client and I get an email from the PBGC because the 5500 indicated the plan was covered but they couldn't find the (sponsor's) EIN in their system and they want amended premium filings going back 3 years... Am I the only one that made this mistake? Is this even a mistake (yeah, i know it is, but it just seems sooooo stupid) Is the PBGC sending out thousands of these notices?

sidestepping your question of whether the most recent return is required: what does the plan doc say? It will specify what rate(s) to use when projecting the hypothetical balance to NRD in order to determine the SLA under the plan. This is the normal ben provided by the plan, so it's what is used in testing to determine the EBAR.

my procedure: Determine what % of the max 415(b) LS was paid out at the distribution date (using age, comp, and factors applicable to that date). That portion of the current 415(b) limit (applicable to today) is used up.

effen, thanks for taking the time to address this, I really appreciate it. Your point about fluctuating interest rates not being an amendment carries the day here I think. I'm less taken with the 411(a)(13) -> 417(e) comments, but I'm on board with the idea that the annuity is not protected if a variable rate is used for the interest credits.

karl, my opinion (which stinks) is that the plan would have to pay the $33.80 in your example. This is a minority opinion, but it's based on the observation that: The accrued benefit is the annuity, and 411(d)(6) protects the accrued benefit. thus 411(d)(6) protects the annuity.

On the (miniscule) chance that someone encounters the same situation: Emailed the IRS and heard back today. Their position is that the MRC is the MRC, and it doesn't matter that it would over-fund the plan. In fact, when I brought that point up her response was "there's no such thing as fully funded or overfunded anymore." :| She didn't seem to think there was any problem with being required to fund liabilities that don't exist. One possible "solution": make an additional $1million contribution to the 2012 year and the plan is fully funded and there is no 2013 MRC. The additional $300K in funding is avoided, but the time frame for contributing is shortened by a year.

If you did ad-hoc amendments that would provide benefit increases that in the aggregate happened to equal the "forfeitures", I don't see a problem with that. I think there's a issue with writing this into a plan as you describe it above though, because the benefits have to be definitely determinable. Also, I think there's a prohibition on negative interest credits, so if there's a loss on assets that's at least one other situation in which the hypothetical balances could not match plan assets.

If I guess your point correctly, you are saying the MRC is reduced by excess assets; but in this case NA < FT, so there is no reduction for excess assets and MRC = TNC + Shortfall Amort Installments (+ waiver install but no waiver here) 430©(2)(D)(vii) states that the Installments include the "acceleration amount" in ©(7), but nowhere puts a limit on the acceleration amount that would prevent the MRC from exceeding the shortfall. So this is really my question: Is there a limit in any guidance, either on the acceleration amount or on the shortfall amort installments, that requires the MRC to be less than the shortfall? my guess at this point is "no", but if anyone could point me towards anything promising I would appreciate it. Some dead end avenues I've looked at: - the limit Andy describes above, where FT is reduced by excess assets. DNA because there are no excess assets. - There is also a limit on the acceleration amount (too wordy to describe, 430©(7) if interested). I've limited the acceleration amount appropriately but this doesn't prevent the MRC>shortfall situation - Automatic Waiver base established? never heard of such a thing, even after looking.

Because of an acceleration of amortization installments under the 2010 funding relief, a plan's minimum required contribution is larger than it's shortfall. i.e. - the MRC would overfund the plan by about $300K. I've tried to find language in 1.430(a) that basically says "MRC shall not exceed the shortfall", but no luck. Does anyone have any suggestions? Is the sponsor really required to overfund the plan? Details (such as they are) follow: The Plan made use of the 15-yr amortization schedule for the 2009 and 2010 years. An extraordinary dividend is paid out in 2013, triggering an acceleration of the amortization installments for those years. Sum of all the amortization installments is $500K, and the acceleration amounts for both basis total $1.8 million; thus the minimum required contribution for 2013 is $2.3million (plan is frozen). Apply a credit balance of $1million and the sponsor has a funding obligation of $1.3million for 2013. Market value of assets (ignoring credit balance) is only $1million shy of the Funding Target. Thoughts? any reliable justification for limiting the required cont. to the amount that would fully fund the plan?

I'd like to get some further thoughts on this, My interpretation has been that 411(d)(6) does apply to the Accrued Benefit as of the end of the prior year. After a quick skim through the regs, I don't see a positive statement one way or the other; but I've been basing my interpretation on the following: - 411(d)(6) is not specifically cited as one of the exemptions for an "applicable" plan - the regs go out of their way to define an "accumulated benefit" as opposed to an "accrued benefit". the accumulated benefit being the formula based LS, (hypothetical account) and the accrued benefit being the associated annual ben starting at NRA. and really, it's that distinction between accumulated and accrued that led me to think 411(d)(6) applies to the AB as determined from year to year. [of course, this is mostly a recordkeeping/testing concern if everyone elects a LS] Critiques please?

the valuation is clearly out of step with reality; I would revisit the 2011 valuation if possible in this case. look at changing lookback or to yc. Is a LS distribution assumed in the val? is the 415 limit properly reflected?