flosfur

Are the segments applied from the valuation date or from the beginning of plan year. For example, for PY 2008 with EOY valuation date, does the first 5 year segment end 5 years from the valuation date or from BOY? In general, for an annuity certain, value @ EOY should equal to value @ BOY increased by the first segment rate. But that will not be the case if the segment terms are measured from the EOY (val date).

How are you computing the effective interest rate, short of actually doing a separate valuation and determining a single rate by trial & error!?

Which one? If there is another appropriate forum then the moderator should have moved my message to that forum!

He is not a minor.

Jill owns 100% of company A and owns 48% of company B. Jack, ex-spouse of Jill, owns 48% of company B and Johnny, son of Jack & Jill, owns 2% of company B. Company B is a manufacturing company and company A is a distributor of products made by B and other companies. 1) Are A & B a controlled group of companies? 2) Is this a brother-sister organization or affiliated service group? The issue: A maintains a DB plan. Does the plan need to cover the employees of B?

...............If your plan was a "small plan" for 2006 (i.e. schedule I instead of schedule H) and this year you have less then 120 participants, you can file as a small plan for 2007. From the 2007 5500 instructions: ...... Thanks very much. I should read the instructions for a change .

Is there some relief/technical correction in the pipeline so that PBGC filing can be completed based on prior year valuation as was the case before 2008? If not, what are people doing?

Ok, what's the 80/120 rule? This is my only plan in the 100 or so count range and this is the first year it went over 100 (last year). So I haven't done much reading on the large plan issues.

Want to test my understanding: A non-contributory DB plan has been frozen for couple of years and as a result there are participants with benefits and employees who have met the eligibility requirement to enter the plan but have zero benefit because they became eligible after the plan was frozen. Under the law, are the eligible employees with zero benefit considered "participants" for Form 5500 participant count? Per 5500's instructions: Active participants include any individuals who are currently in employment covered by a plan and who are earning or retaining credited service under a plan. I believe they are participants because they have service/participation credits even though they don't accrue any benefit. Also, per the instructions to PBGC Form 1 filing, these employees are participants for 5500 but not for PBGC Form 1. This has become an issue because the plan would not be a small plan if the active employees who have met the eligibility requirement to enter the plan but have zero benefits are considered "Participants".

Under PPA, a non-spouse designated beneficiary, as defined in S401(a)(9)(E), is eligible for direct rollover to an IRA. Per S401(a)(9)(E), a "designated beneficiary" is any individual designated as a beneficiary by the employee. A participant died without a surviving spouse and without designating a beneficiary. Under the plan provisions, default beneciaries are the deceased participant's children. Are they considered "designated beneficiaries" for Inherited IRA rollover purposes? I don't think so, because in this case the employee did not designate the beneficiary(ies), but I wanted to confirm my conclusion.

Thanks. That's very helpful.

I didn't. I got this plan from a TPA where the business started June x, say, and the TPA entered the first plan year to be June x to December 31st, thinking that the plan start must be on or after the business start date! (My understanding is the plan can be effective from Jan 1 even if the sponsor commenced business after Jan 1).

Does changing a PY requires IRS approval? At a recent conference, during one of those off the topic conversations between the panel members, I heard some reference to changing a plan year and then Jim Holland chimed in saying, you will need to obtain an approval from the IRS to change the PY.

Brand new plan with short PY for the first year. Is one required to pro-rate charges/credits as is the case on plan termination (Rev. Rul 79-237)? To my thinking, one is calculating annual contributions payable from the valuation date over the working lifetime of the partcipants. So for an EOY val on 12/31 say, one is calculating annual contributions payable from 12/31, and it is irrelevant if the plan is a full or short plan year? What if the plan year is changed for an exsiting plan?

What does pbo stand for, as it is used here? I googled for pbo and found these terms. Acronym Definition PbO Lead Oxide PBO Packed By Owner (shipping label) PBO Paraburdoo, Western Australia, Australia - Paraburdoo (Airport Code) PBO Penicillin in Beeswax PBO Pension Buyout Obligation PBO Performance Based Organization PBO Personal Banking Officer PBO Placebo PBO Plan and Budget Organization (Iran) PBO Plan, Build and Operate PBO Plate Boundary Observatory PBO Pocket Box Office (mobile games by Airborne Entertainment, Inc.) PBO Polarized Born-Oppenheimer PBO Poly-Paraphenylene-2 6-Benzobisoxazole (Zylon) PBO Polybenzoxazole PBO Polymorphic Buffer Overflow (security attack) PBO Portland Baroque Orchestra (Oregon) PBO Power Back Off PBO Practical Boat Owner PBO Pre-Birth Order (legal adoption order) PBO Prescribed Brand Only PBO Presiding Bishop's Office (LDS church) PBO Private Banking Online PBO Process Before Output PBO Profit Before Overhead PBO Program & Budget Office PBO Projected Benefit Obligation (pension plan accounting) PBO Property Book Officer PBO Publiekrechtelijke Bedrijfsorganisatie PBO Pixel Buffer Object PBO Playback Orchestre PBO Profiler Batch Output PBO Profiler Binary Output

I recently received an emailer from a local actuary (who happens to be from India) who has setup an outfit in India. I thought it was bad enough when an actuary just reviewd & certified the Sch Bs where a TPA had performed the valuation. I wonder what is in store with outsourced cases! I have inherited some beauties over the years. One year the assumptions are 8%, next year 5%, 6.5% the next year! I have just taken over a case where interest assumption went from 8% to 4% for one year to the next? No one is checking for underfunding or for excess assets! There is no actuarial consulting! Some TPAs think one doesn't need actuarial knowledge to perform the Valuation. All that is needed is a DB valuation software which will take care of everything. And they turn to an actuary only for his signature!

I was more interested in what the law requires as it pertains to non-spouse beneficiary. The document only refers to "participant's" rights when addressing the QJSA and 30 day wait period.

Death benefit under a DB plan is actuarial equivalent of accrued benefit. Normal form is life annuity. 1) Other than the election to rollover or not the lump sum distribution, the beneficiaries don't need to be given the option of J&S - 50% or otherwise? 2) Do they need to be given the life annuity option (because that's the normal form)? 3) Does the 30-day wait period apply to payments to beneficiaries?

I want to confirm my understanding of the attribution rule concerning children over 21 before I act on it. PBGC regs 4041.2. For determination of a majority owner, attribution rules of IRC S414(b) apply. IRC S414(b) then refers to S1563 for attribution. Per S1563(e)(6), the attribution between children over 21 and parents apply only if one of the parties involved owns "more than 50%" before application of S1563(e)(6). So, if a father owns 50% or less and his two kids, ages over 21, each own 10% say, the chilfren's ownership is not attributed to the father or father's ownership is not attributed to the children. Is this correct or am I missing anything?

And a range protects from that!? And How?

Doesn't the same go for the range - i.e. the final number better be in th range? What protection does the range provide that a single number does not? And isn't an estimate also a non-precise calc of whatever one is estimating? For the application of S436, what's the difference between saying 59% Vs less 60%? Or 79% vs. between 60-80%? In fact, isn't the range less useful than a single number - <60% could be anything from 0 to 59.9999%, etc? So what comfort does the <60% provide?

Where does it say that? I see an exemption to accelerated benefits restriction for plan frozen on or before before 09/01/05 but don't see anything for plan termination or plan freeze after 09/01/05!

A calendar year plan was terminated in 2007 - it was not frozen on or before 09/01/05.. a) Is the plan required to have an AFTAP cert for 2008, and if yes, b) Does the AFTAP have to be 80%+ for 2008 before the participants can be paid in full? c) If payouts are restricted, does the plan termination stay in limbo? d) What if the sponsor cannot come up with amount required to increase the AFTAP to 80%+?

What's with the "AFTAP range"? How is that any better than a single "Estimated AFTAP", which would be a single number and not a range? Does an estimate have to be a range? To come up with a AFTAP range, one will have to estimate assets, wages etc based on low & high assumptions - i.e. assets growth x% or y%, increases in wages of a% or b% so on. Why not just use one set of assumptions and come up with one estimated AFTAP number?

As written, doesn't your first paragraph answer your question in the second para? In the second paragrapgh, do you mean if partially vested terminees were paid out and there were 0% vested terminees - who terminated within one year of plan term? Plan document would address this in the Plan Termination section. Generally, what I have seen is that terminees who have been paid their vested benefits are not entitled to any additional benefits on plan termination and 0% vested terminees are deemed to have been paid out.