AndyH

I think what you and others are saying is that the consensus is building that the hypothetical balances less the assets is one of the maximum deductible amounts. If the val date is 1/1 and the contribuiton is made the following 9/15 does the maximum get increased with interest? If so, what is the justification for that?

"Not really, although most I talked to seemed to think it is ok to use an "at-risk" that is equal to the sum of the hypothetical accounts - but there was nothing official." To Effen or anyone, Maybe this is the wrong thread for this, but how is this being interpreted for a beginning of year val? Wouldn't the maximum be (at least) the unfunded account balances at the val date? Or is this being extended to the end of year or the payment date with interest? If so, where is the authority for that?

No sample 436 Notices? No imminent guidance? Anything on 404 limit for cash balance plans?

Anything on quarterlies, Notices, interest discounting, anything of note? Anything confirmed as unclear?

Well, I guess there is no consensus. Don't know about 1. Good question. We assume a notice would be required under 2 under current guidance because the plan is "subject to" the restriction. This precludes an amendment adding such an accelerated payment, for example.

Ingrain the words "At Risk" in your head and figure out how to avoid it.

Thanks Mike. And Tom.

Of course, but I've already completed part of it for you. Under explanation, simply put "This is a horrific abusive excess of authority".

Now there going to be 500,000 filings with the same "investment stategy"!!!

Well, I happened to turn it on around the 7th inning and did not recognize a single name in the Yankee's infield or outfield, so that told me all I needed to know. I think all the standard investing books will be re-written once we get through the current fiasco. The only question is what is the bias of the authors.

You betcha! Well stated. The only thing I would argue with would be the 10 year ago comment. That, like any statistic, can be twisted any which way in hindsight. I don't agree that an annuity belongs in a DB plan at any time, but that is just one personal opinion, and I certainly respect a reasoned argument to the contrary.

You describe many of the advantages of a pillow case buried in the back yard, absent the illiquidity possibility, and of course the penalties and surrender charges. If you dig it deep enough where nobody can find it easily, it might be there a whole lifetime and be fully payable upon death as well to the designated beneficiary who gets the secret treasure map.

This is a horrific abusive excess of authority, IMHO. The quarterly/credit balance rules under PPA make no sense to start with. Now 2 life plans are threatened with outrageous penalties if they don't fund quarterly?????? And again we get a couple of weeks notice. Ridiculous. Is ASPPA doing anything about this? What are they doing for DB plans? p.s. Is there an editable Form 10 on the Web somewhere? PBGC sure couldn't be bothered to do something that customer friendly.

Which exit is the center?

My guess is he is thinking FAS 88 - where both constitute settlements and are treated the same.

1. Yes, unless it is the QJSA. 2. Sure, if the plan says that the optional forms (including the QJSA) are the actuarial equivalent of the normal form, or if the form is not the QJSA. In other words, the QJSA would be reduced by plan terms if not explicitly "subsidized" under the terms of the plan. The 415 limit is based on the lesser of the benefit adjusted using plan factors and the benefit adjusted using statutory factors (in this case no reduction).

A cat in a hat is a cat not a hat and not a dawg. No, a lump sum is not an annuity purchase and is not handled like one.

Is a retroactive amendment permitted to be recognized for valuation purposes under PPA?

Thank you both. I'll look at the govt materials. Any suggestions for a timeline? One letter, x days notice, followup threaten rollover, execute rollover? Any financial orgs other then Penchecks (not that there is anything wrong with that but I'd like to give client a choice)?

Plan sponsor wants to amend plans to change existing cashout provision from voluntary to involuntary for 1K to 4.99K. About 85 people would be cashed out and there would be trouble locating people and trouble getting signatures. Is this viable? All of our other clients adopted the voluntary rule so I have not been through large scale forced cashouts. This client needs to get below 500 to avoid at risk status. Is it common for financial institutions to accept the non-signature IRAs for non-cooperative participants? How are they set up and how are fiduciary or investment decisions handled? What have others experienced?

Thank you. That makes perfect sense.

Thanks, but I'm not completely following. And, yes, we have a bunch of clients with these - and they are selected unfortunately. They tend to be large "yellow brick road" plans that are products of mergers and acquisitions that acquire plans along the way and add their peculiar provisions. Your quote: "Under section 436(d)(5), a ‘‘prohibited payment’’ is (1) any payment, in excess of the monthly amount paid under a single life annuity (plus any social security supplements that are provided under the plan), to a participant or beneficiary, . . ." Is a levelling adjustment different than a "social security supplement?" or are they the same animal? If the same then I have not paid "any payment in excess of .........", have I? Thanks again for your help.

Under what circumstances is a pension increased by a social security leveling option subject the 436 restrictions? Is this different than a social security supplement? What is a QSUPP and is that relevant to this matter? Can anybody explain how these things are affected for AFTAPS below 80%? The Code is clear as mud, and various conference seminars touch upon these matters but are less than clear. Thanks

Shouldn't partial service be credited under the elapsed time rule?

I started a long post on this subject a few months ago because I had the same issue - takeover plan. It is not uncommon to have a last day requirement, but I agree it is not allowable if a participant has 1000+ hours. The Cash Balance Answer Book, for example, says it is permitted (or at least it did then). There is a lot of misinformation on this subject. I agree with John and David's comments. I also thought that Relius' document permitted it, but someone pointed out correctly that if you read it carefully it does not.