AndyH

Thanks.

I confess I haven't yet read the law, just summaries and the committee report or "Technical Explanation" report. But even ASPPA's webcast yesterday (slide 39) says "The phased-in target is available .........". I'm probably being picky, but I haven't seen much if any discussion of the extra work this will require. For 4/1/09 AFTAPs, many 1/1/2008 valuations will been to be revised because the COBs will be wrong. This means recalculating 2008 quarterlies and interest charges as well.

Is the 92/94/96/98% phase in mandatory, or optional? I keep seeing the words "may" and "available" but I don't think those words are accurate. If a plan that was not subject to 412(l) in 2007 established an unfunded base for 2008 equal to the unfunded target liability using 100% of target liability, the minimum must now be revised, right? This seems to be a mandatory change retroactive to 1/1/2008. Is that right?

Thanks Mike. That makes perfect sense. Is this interpretation widely shared? Have any IRS people commented? Presumably, 404 regs would address this. I'd be interested in knowing the agenda schedule for that if any.

Upon recognizing this, we stopped doing new cb plans in 2008 until this gets satisfactorily resolved, which it hasn't. You are using a low crediting rate I assume, right? A higher rate (5.5%-6%), albeit maybe illegal, would solve the problem I think. Blinky and Mike are discussing an alternative approach using at risk factors for 404 purposes. I don't know how that works with a vanilla CB plan that is assumed to pay lump sums, but I am all ears. Others have devised 3 year bailout programs where the plan is made whole after about three years. Another approach is to somehow create a past service liability and use the cushion from that. These strike me as excessively high maintenance if a regular DB plan is an alternative. You can conder using a higher interest credit.

Agree. But if the person isn't vested at the time the payment would otherwise be made, it may be deferred until he/she is vested. Agreed. Thanks for the enhancement.

You rang? Of course, buying the annuity product is better than not buying it, but what you really need is life insurance and lots of it! Everyone knows life insurance is the best investment anyone can ever make. Am I right or am I right? Right? Right? Right? That's because the huge commission and potentially lower returns means a huger tax deduction. Simple math, right?

I saw bunches of 2008 proposals from afar that assumed the accounts could be funded. People were expecting "technical corrections" to save them. But apparently Letterman did a "Will it Float" on it the technical corrections "cushion" and it did not float. Andrew, I bet there are lots of people just dicovering what you have in front of you. Blinky, many witches need your potions.

Two different questions (a) is it allowable and (b) is it a good idea. (a) depends on the specifics. DB assets are not earmarked, so assets are not allocated to one person if within a plan unless part of some participating contract, so what is the point to the contract? Does it have "benefits, rights, or features" that others would not have? Probably. If so, those may need testing and the result may be a failure making (a) NO. (b) depends on the specifics. I share your concerns and find it highly unlikely. Earth to Ned Ryerson

A colleague called today and was told that there would be a 12/31 posting, and that the Corporate Aa rate was 5.54%. Let's face it, they're all just messin with us. One big conspiracy.

They issued 12/30 and 1/2 but not 12/31. Anybody know why, and if there will not be a 12/31 post definitively? The rates have moved quite a bit during that period. When will we know there won't be a 12/31 rate?

ASPPA confirmed their ASAP was errant/unclear on his point because it described "qualified plans' and did not note that it did not apply to DB plans.

The fact that the plan was frozen is completely irrelevant. Consider the question if the plan had not frozen and you'll get your answer.

What does that mean?

Great point.

Are you reporting all the facts? The lump sum option may well be "frozen", but the participant should have the right to an annuity payment. Are you certain that he/she does not? Your client should ask these questions to the employer in writing and request a written response, IMHO, i.e. what payment options are available when, and what if any payments are "frozen".

I'm not referring to Congress doing anything. I am referring to those that got burned getting whatever payback is possible.

Maybe we are going to find that the SEC failed in their duties. That is the next shoe to fall (or be thrown). There is too much money involved here and too many egos for any culprits, governmental or otherwise, to get away unscathed. Lawyers are going to be circling like sharks for a long time, methinks.

Just a wow. How many more of these ponzi dudes are yet to be revealed? Shocking this was all "self regulated". Apparently SEC plays nice with these people and lets them regulate themselves; has a donut and cup of coffee as an audit, I am told. The last ponzi revelation I know of (years ago) ended with a family of three getting killed with a crossbow by the investment pro when they called his bluff.

Thanks.

ASPPA's ASAP says that minimums for 2009 for qualified plans would be waived under the pending legislation. Reading the technical summary from Congress seems to limit this to DC plans. Is the ASPPA ASAP wrong (call it incomplete or misleading if you wish), or did I miss something about DB minimums?

Agreed. And if we get a recovery above the third segment we have that dragging us. Smoke, mirrors, and a ball and chain. MISSION ACCOMPLISHED

How about this:

I read on this board quite a while ago comments that the cushion was no longer being included in drafts.

If this is all there will be, I will clap with one hand. Actually I will clap not all. This is mostly minutia. Where is the relief? If this is all ASPPA/COPA is pushing for, I am extremely dissapointed. The ASPPA ASAP describes this as "critical short term relief". Not so for 95% of my clients.