dmb

I agree that burning CB would be best in this instance, but this is a made up example.

I realize that logic and PPA is a contradiction in terms, but please let me know if i'm correct in following example regarding shortfall amortization charge: 1/1/09 valuation: FT= 100,000 AVA= 110,000 COB= 15,000 PFB= 0 PV of Prior Charge= 20,000 2008 Amortization Charge= 5,000 Since AVA-PFB > FT, there is no amortization base set up for 2009 year, but since the AVA-PFB-COB < FT, the 5,000 charge does not get wiped out and is again charged for 2009. But consider that if the 2009 shortfall calculation is followed through we get FT-AVA+PFB+COB= 5,000 shortfall. Since this amount is less than the 20,000 PV of prior charges would otherwise create a shortfall credit for 2009. So instead of being able to utilize a shortfall credit for 2009 that would have resulted in a lesser cost, because the AVA-PFB > FT, there is no charge (or credit) for 2009 which results in a higher cost than what would have been created if the shortfall calculation could be carried through. Is my calculation and assumption correct and if so is there logic behind it?? Thanks.

Fifthed!

FWIW, i see no reason to certify 2010 AFTAP in May. You would only be certifying to same 60-80 range as 2009 and there would be no change in operation of plan even after reducing 2009 AFTAP by 10%. No reason not to wait util 9/15/10 to certify 2010 AFTAP.

Can a Safe Harbor 401k plan be amended mid plan year to change a provision that doesn't have an effect on the 3% SH NEC, but might have an effect on contributions made above and beyond the SH NEC?? Thanks.

FWIW, we have some not-for-profit organizations with the same setup, 403b for deferrals, 401a for employer contributions. After reviewing regs mentioned in this string, we came to conclusion that 403b and 401a are treated as two separate entities for 415 as well as 410b testing, so we think a participant can defer $16,500 in 403b and receive $49,000 in 401a.

I have a similar situation where plan is also frozen (as of 2/1/08), 2009 AFTAP was certified 63% thus 50% restrictions, notice issued timely. 2010 AFTAP will be in same 60-80 range and 50% restrictions will continue. After reading regs and discussion with fellow actuaries here we also don't believe any action is necessary if same restrictions continue to apply.

All egg talk is giving me eggzema!

I am preparing Demos for a Schedule Q filing for an Age+Service based Profit Sharing Plan that counts prior service from affiliated employers to be counted for eligibility, vesting and allocation. I have not done many of these for DC plans, but i have not seen any Demo 7s done for any of our DC clients and was wondernig if the past service issue pertains to DC plans or not. Any help would be appreciated. Thanks.

The question is does the exception in (d)(4) not apply simply because the plan provides for increases under 415 or only if there are actual benefit increases due to increases in 415??

The wording of IRC section 436(d)(4) in the final regs are a little different than the proposed regs with regard to benefit increases pursuant to a plan amendment for a plan that was frozen as of 9/1/05. The final reg states "If a plan this is described in this paragraph (d)(4) provides for benefit accruals during any time after 9/1/05 (treating benefit increases pursuant to an amendmen as benefit accruals), this paragraph (d)(4) ceases to apply for the plan as of the date any benefits accrue under the plan (or the date the amendment takes effect)." Under the proposes reg we have been treating all our plans that were frozen as of 9/1/05 as exempt from 436 restrictions per (d)(4) since there were no actual benefit accruals. However the wording of the final reg is gving us second thoughts about whether simply the provision in the plan that increases benefits for 415 increases would eliminate that exemption regardless of whether benefits actually accrue. I was wondering if any others have given this any thought what the consensus might be. Thanks.

This is important. There is not universal agreement on this. Some would argue that the spousal waiver needs to occur at the time of the first election. I'm not sure I agree but some do. I'd like to hear other opinions. We do not offer re-elections at plan terminations. Retirees that are receiving their retirment benefit as a monthly annuity from the plan will have an annuity purchased for them.

I second the Georgia State University seminar.

A calendar year DB plan is terminating 12/31/09, proposed distribution date is 3/1/09. We are in process of issuing Notice of Plan Benefits. Are PPA compliant benefit statements required to be issued also or would the NOPB be sufficient? Thanks.

The PRLI is not part of the DB plan, its a separate entity.

It seems like the first option, the FAS 106 does look like a FAS 158 report. Thanks for the help.

What kind of FAS report? 87? 106? Other? Its a FAS 106.

I don't have much experience with Post Retirement Life Insurance (PRLI) and i am trying to value the liabilities for a FAS report. I'm sure contracts are different from plan to plan would like to know if there is a basic principle. It was my understanding (or at least what i've been told) that a participant is not covered by the PRLI unless they retire (claim benefits) from active service so we weren't valuing liabilities for terminated particpants. I have a situation where it seems participants who terminate after age 55 (earliest date benefits can be claimed) but do not claim benefits until a later time supposedly become covered upon claiming benefits so these participants would need to be valued. Again, not sure if this is different for all contracts, but would like to get opinions if not actual facts. Any help is greatly appreciated.

Don't forget about PBGC comprehensive premium filings for small July plan years due 11/2/09 or how about Annual Funding Notices for July large plans due 10/28/09. Not to pile on.

Maybe the "New Math" will be part of the final PPA Regs, maybe that's the hold up.

If the AFTAP was certified to the 55% on 9/30/09, it would not be presumed (although result would be same if it wasn't certified at all before 10/1/09) and yes the 55% kicks in for at least the remainder of 2009.

Many issues here in my opinion. I believe that once you have funding elections and final data to calculate teh 2009 AFTAP the employer should have a reasonable amount of time to make contributions to avoid restrictions if desired, but then the 2009 AFTAP should be certified. Not sure if I agree that if you are able to determine the AFTAP would be 55% that you can wait 6 months before actually certifying. Assuming that not certifying by 4/1/09 is ok, then you have the participant notice issue. I haven't had to address the non-distribution of participant notice issue but i'm sure there are consequences for that. If the sponsor changes funding elections after 9/30, i don't think its ok to certify an AFTAP after 9/30. Once 9/30 has come and gone i think your stuck with the 55% AFTAP that was certified on 9/30 for 2009 until 1/1/10 regardless of whether particiapnt notice is issued or not.

I might be, but is that still in effect under PPA??? Thanks.

I thought at one time i read that if the employer elects an averaging method of valueing plan assets, they could always switch to Market Value method, can't find where i may have read this. If i am correct does anyone have a cite? And if i'm not correct, please let me know. Thanks.

Yes, and Friday afternoon at that, and Friday's before a weekend that many of us would not be working on Monday....but i digress.