AndyH

Hi Lori: Yes, it is a lump sum distribution of an accrued benefit IMHO. I think if you look at the plan document (at least each one of these that I have seen) the accrued benefit is comprised of both the employee-derived accrued benefit and the employer-derived accrued benefit. The latter is defined as the greater of the total less the ee derived. Either way it is still an accrued benefit. This applies to an ERISA plan. A Non-ERISA plan might not have the same language but I would use the same logic for purposes of that question.

Guaranteed value? In a depression? Care to take that one back? I repeat. What happened to the idea of group term life outside of the plan? Where is Ned?

MaryMM, Yes, you did pay for it, in several ways: 1. You should have received a 1099 at year end that should have been added as a tax liability on your tax return. This is called a "PS-58 cost". 2. You most likely earned a sub-standard return on the cash value of the policy. The insurance company and/or agent got the difference. 3. Many companies use bogus factors to compute the PS-58 costs. Those that do not pay their fair share cause taxpayers in general to pay more. [i know I know ..... but in theory this is true] Your employer could have provided you with a $25,000 life insurance policy as a benefit to you outside of the plan and you would not have had to pay the PS-58 tax cost.

You would prefer to attend a clothing optional reunion for the class of 1976 rather than the class of 1996? Great thread!

I have a situation that might call for a QSERP, most likely as one flat dollar amount added to one person's accrued benefit by an appendix to a document. No SERP currently exists. Are there 409A concerns? Other concerns (other than general testing and PR)?

Thanks for the line, Blinky, but it doesn't save me. I don't think JH's comment makes any sense at all. I would like to know the reasoning, cite, etc. Merlin, maybe you can spin some magic and get him to post? I've looked at a few text books since this thread and nobody's touching it. Does anybody actually comply with that, make the "final" contribution before the final amount is known? Now that is magic. p.s. Actually, the EOB says (I think) that the deductible amount is only up to the Full Funding Limit. Since there would be no FFL in the year after termination, that is probably JH's argument. So that is probaby the safe thing to do although it seems impractical to me.

By the April 1 of the year following the year in which he attains age 70.5. Same as a traditional IRA.

It seems to me that the "same rules" language is in the section covering minimum funding standards, whearas the deduction limits language is different. See page 161 of the JCT's "Technical Explanation". This would seem to indicate that the corporate bond rates do apply for 404, not the T Bond rates. That is the interpretation that my office is using, that for 2006 one CL rate is used for 412 and 404.

Opinions from a Red Sox fan: 1a. Not necessarily. 9/15/06 is the date that any amounts needed to avoid a funding deficiency on the 2005 Schedule B must be deposited. So it depends upon the 2005 412 calculations. The minimum amount due for 412 purposes is the minimum amount must be deposited by 9/15, which may be less than the termination liability. 1b. Yes 2. Yes.

I happen to have a sales proposal by another firm that I'm looking at that is not detailed but it does appear to be a dc plan plus a self directed cash balance plan. There are about 50 participants that would be covered. There is of course little detail, but among the exhibits are growth charts that use an assumed 8% growth rate. This is represented as a "proprietary" design. The words "self directed" and "virtually unlimited investment options" appear to include the CB component. Any opinions on the validity of such a design? From the comments above, it sounds like it might fly. Agree/disagree?

This "poll" seems to be unanimous, Don.

Obviously I am incapable of approaching your thought level and will desist from further efforts. Do you work for a MA based insurance company? If so, the world is much, much smaller than you know.

I thought the Notice was clear on that issue. I don't know anybody who would consider it useable if there is a receivable exceeding the amount in question.

What is the concern about a quarterly being 6 days late? It is not reportable as such to either the participants or the PBGC, it appears to me, except for maybe the ERISA notice (is there a 30 day exemption-I don't remember) which has no known due date. But, for whatever it is worth, 7/21 is not 7/15. p.s. is 7/15 the extended tax return due date maybe?

So the document might not have the currently correct and complete (like our pitching staff) answer? Imagine that , B.

Back in the old days when it was one P? And your name is ...?

Understood, but that (your second paragraph) represents the viewpoint of a small minority of the people that I have spoken to about this. It also contradicts the approach taught by ASPPA-associated actuaries in both conference sessions and textbooks. I can off hand cite Joan Gucciardi, Norm Levinrad, Carol Sears and Scott Miller to name just 4. (They may have changed their positions for all I know - this is 3-4 year old information). Larry D changed his position on this in the last session I saw him do. He said JH said he was wrong to ignore the lump sum in the MVAR calc. I don't disagree with your comments, but it seems there are 99 differing interpretations of this. Something such as a TAM would sure be nice. Thanks for the comments.

SoCal I am of the opinion that you should go to those boards and stay there. Your criticizing of questions and people is getting out of hand. These questions are entirely appropriate if a db plan is involved since the death benefit rules are very different.

My experience has been nightmarish. I share Gary's concerns. Effen, your company was named as filing coordinator? I had the impression that the client needed to have that role.

Thanks for the additional comments, but a followup if I may: Would you clarify this comment please. Are you saying, that as a condition of qualification, that if a plan has a 7% aeq reduction for early retirement then it cannot have a 6% (or 2% e.g. less than 7%) flat rate for lump sums (in which case the ls is the greater of a 6% calc or a 417(e) calc). If this is true then the ls would always be ignored if 417(e) is ignored. Or am I misunderstanding your comment?

My understanding is that in a bona fide plan with a bona fide COLA provision the payment could be increased for 415 indexing but in reality these (small) plans are going to be terminated, not maintained indefinitely, so an annuity purchase would be the only option at some point. I don't know if 415 indexing could be done after an annuity has been purchased through some type of annuity "feature" but if so that would be the way to go.

I suppose that purchasing tickets (in the spring) to the annually planned Yankee Elimination Party and then trying to unload them in August could improve the overfunded status. The answer to your question is all a function of Ned's annuity pricing. But, yes, a J&100 with a young spouse could solve a 415 problem in some cases.

A few days ago I heard a radio commercial from a national host that was pushing the purchase of gold coins as a solution to overfunded DB plans. It was caviated with "I'm told that the purchase of gold coins is a solution to overfunded pension plan problems......." I've yet to figure that one out but ....... what's the game "Whack a mole"? Convert an overfunded 412(i) into a db plan fully invested in gold coins? And, then what, wait for deflation? Gold coins-New 412(i)????? Ned, are u licensed for that?

http://benefitslink.com/boards/index.php?showtopic=33117

Thank you. I think that needed to be said.