AndyH

The statement requirement only applies to vested participants. If you are entiled only to a refund, with our without interest, you must not be vested.

Is this a union plan? If so, maybe the contributions are not employee contributions after all. Does the PPA statement requirement apply to all union plans? Could it be a delayed provision? Just random thoughts while reading the comments.

A calendar year plan with $700,000 of unfunded vested benefits for 2009 has an active participant reduction (from 1/1) of 21% in 2009 and again in 2010. It appears that this plan would be exempt from a PBGC Form 10 Active Participant Reduction report for 2009 if the 2008 UVB as reported on Form 10 was less than $1 million, and similarly the 2010 criteria would be based on the 1/1/2009 UVB. Is this right? (The plan is over 100 participants).

Please explain what this is. It's a Ned special, a state of the art (at that time) former 412(i) plan with springing cash values. Boing, boing.

That is a big help, thank you.

Can a multiemployer DB plan stop payments to people who retired from Union employment (at then-age 55 NRD) that are now collecting a monthly check and working in non-union employment? I thought not, don't see any such language in the current plan document, but others are insisting yes, the plan should contain this language or could be amended to contain this language.

Clearly they must be notified ASAP ! Thanks for the comments.

Thanks for your comments. I'd love to see something in writing about the SAR issue also - I thought that must be distributed to participants who were such as of the last day of the plan year, although I have heard "rumors" that you could handle it as you describe, to participants as of the distribution day. I'm nominating you as the Director of such issuances because I do like your answers.

Does an AFN still need to be issued for a terminated plan.? Plan terminates 12/31/2008 and IRS takes forever to approve termination, resulting in a mid 2010 payout. Must a 2009 AFN be issued (by 5500 filing date of 10/15/10)? What about next year, is a 2010 AFN needed for the final short year? I've heard nothing but quiet Yesses on these questions. Is there any new information?

No, it is not ok. You test what they actually get under the general test. (I don't think everybody was addressing that particular question).

I agree with you, but I also heard him say the (2008 I acknowledge) SB is filled with errors and was done before the regs were issued, although he did say that the instruction have a better chance of being correct than the form. So how do we know the instructions are "correct". Also, my relius software calculates the rounded AFTAP, and it creates a validation error if you override it. So therefore I ask as we truncate and truncate what others are doing. Is everybody going to go back and revise their March AFTAPs to make sure they are truncated? That's the zen question of the day.

Just to be clear, I am asking about the signed AFTAP, not the !@#@$!!&%##! SB.

Are you truncating or rounding? Any guidance from the IRS other than the SB instructions that say to truncate entires on SB?

Roger, Striker. And do you like movies about Gladiators?

Isn't the Gray Book Q&A that David linked the written source? I doubt there is anything more formal than that in print, but if there is Mike will shirley know where it is.

The 403(b) Answer Book (Q4.39) states that the sponsor may elect to aggregate a 401 plan for purposes of testing the 403(b) plan. The context is IRS Notice 89-23, but I would check the final 403(b) regs as well if you want a source document. That pretty clearly is the correct rule, as I had stated. The aggregation for testing of a 401(a) plan is prohibited because the 403(b) plan is not subject to 410(b) aggregation because it is not defined as a plan for that purpose.

It's an interpretation of 410(b). A careful reading is required. In addition, a review of the final 403(b) regulations would be prudent. Start with 1.410(b)-(7)(a) which defines what a plan is for the aggregation rules that are exclusive to 410(b). A 403(b) is not a plan for aggregation purposes. A 403(b) plan I believe is now tested under the 401(a)(4) rules but those aggregation rules would point to 410(b) which does not aggregate the two types. You'd have to research this carefully to be comfortable. I have before, but it was a while ago so I can't be more specific right now. You can also check out the Answer Books or the EOB for further interpretation.

My understanding is that the DB plan can be aggregated with the 403(b) plan for purposes of testing the 403(b) plan but that the 403(b) plan may not be aggregated with the DB plan for testing of the DB (or any 401(a) plan). If I am incorrect I would like to know that, but I'm pretty sure this is right.

See Tom, when you cross over to the dark side, there's lots of people that keep you on your toes.

What does the document say?

Sure. There is no prescribed notification timing for late quarterly notice under the ERiSA requirement, it's based on regulations to be issued by the Secretary that never were. There isn't currently a PBGC participant quarterly notice requirement, is there?

Thanks for the reply. Are you aware of any written guidance on 2 and 4? My question relative to 2 has to do with whether or not the contribution must be credited for the plan year containing the hours worked, as opposed to using part of the 8.5 months to finish funding the prior year. And there seems to be some question as to whether that is permitted. It does seem clear that the surchare applies for contributions for the year that was certified as critical.

Any experienced multiemployer practicioners out there? Questions: 1. Plan goes from green to critical. When does the 5% surcharge start, 30 days after the employers are notified of the status, or at the start of the rehab period (which can be much later)? 2. How is the 5% computed, being 5% of "the amount otherwise required". What is "the amount otherwise required"? 3. Where does the 5% come from, the employer's pocket? Or can it be mandatorily passed along to the employees? 4. When is the 5% due, concurrently with regular remittances, or by the minimum funding deadline? Thanks for any help.

My recollection is that an amended filing was done (not by the cold callers) and there was time before the permissable amended filing period expired. That is how they targetted them, they looked at the amendment period - I want to say it was 3 years. This goes back a few years and it was a takeover that I was only peripherally involved in so I don't recall all of the details. But I did check it out and it was legitimate. My guess is that the approach descriibed by nancy is similar but the details different. I bet a lot of people overlook the 25 participant rule and the standard termination examption, for example. But these may be different people because in the one I ran into they were looking to take over future valuation work. This one seems motivated differently since the plan was being terminated. Same idea, though, must be an FOIA filing to get the data to develop the call list.

I ran into this a while ago for an active plan, and it was not a sham, it was a sales pitch but it was valid. It had to do with the availability of the FFL exemption (pre-PPA) or something like that. So the actuary said that by changing the method the premium could be reduced, and it was shortly before the period expired for amending that particular filing. Somehow they got access to PBGC filings, presumably with a Freedom of Information Act filing. Nothing better to do it seemed. So, nancy, I'd suggest that you reexamine that filing and see if any alternative method is available, perhaps the <25 person exemption for example? Or maybe a prorated short year refund, something like that.