Gary

does erisa require plan administrators of union plans to provide documents, etc. upon request just like the private plans are required to do? do those same rules apply to union plans? thanks.

i don't have specifics at this moment, but the courts have not been so generous on this issue as of late. i.e. they sometimes are not requiring that any damages be paid due to this error and in other cases they are ruling in favor of the class rep who had the claim but not certifying an entire class. in other words it's every man for themself and each individual has to file their own claim to collect any damages. with that said i believe it is a good idea to clean this matter prospectively for sure.

I am reviewing a pension distribution for a participant. A plan provides an offset based on a family soc sec offset. never seen this anywhere else before. This is where the retiree's offset is based on a soc sec benefit that is greater than his own individual benefit due to an increase based on the spouse's higher soc sec benefit. anyway the plan provides a basis socs sec offset untila ge 62 and then adds an additional offset at age 62 as a result of the spouse's soc sec benefit. the plan says that in no way can the actual offset exceed what's is permitted by the Code. Well it appears that the actual offset exceeds what is the maximum amount permitted by 401(l) at the early ret age of 57 and again after the additional family soc sec offset at age 62. This occurred because the offsets weren't reduced much from the age 65 offset and would exceed the 401(l) required max offsets at the early ret ages. My question is: does my logic appear solid and when they refer to the max permitted by code is it generally reasonable to apply 401(l)? I am presuming at this time that 411 accrual rules are not violated. Of course they may just mean that it passes 401(a)(4) non descrimination and the hell with 401(l). Curious to get any thoughts on this. Thanks.

A plan computes lump sum using the gatt basis. The plan uses the greater lump sum amount under gatt or a basis that uses 6% for lump sums under 3,500. If that is the case should the over 3,500 lump sums also mandate that the amount be compared to the 6% basis since it is done for lump sums under 3,500? Any thoughts? Gary

a plan provides for int credits of 4%, but through annual amendments for many years keeps providing an annual credit of 8% or close to it. s/ this be considered a permanent plan amendment and be required when projecting a terminating ee's account balance to 65 for accd ben purposes? they also use one rate for active ees such as the 8% after each amendment, but a lower rate of 3.5% for inactives. this seems like a forfeiture in violation of section 411 and possibly a 411(b) backloading violation all in accord w/ 96-8. any thoughts out there?

I am reviewing a participant's distribution. He received an early out window lump sum. I disagree with two items of lump sum calculation. 1) interest rate 2) age used to determine lump sum factor. 1) Interest Rate - section 5.22 includes "rate shall be App Int Rate ... 417(e) for the month of December preceding the first day of the Plan Year in which the distribution occurs ..." This is a Plan amended for GATT (i.e. 30 year Treasury) with a calendar plan year. What 30 year rate do you interpret this plan provision to mean? 2) Age - The window amendment provided for 5 additional years for purposes of the early ret factor and for additional credited service. Say a person is age 55 and the lump sum was based on the immediate annuity due him. Would you then compute the lump sum based on his age 55 or would you use age 60 (55+5) and use an immediate annuity factor based on that age? Look forward to other observations. Gary

they do not specify exactly what supplemental employee is. it does seem to be like a temporary employee. the person i believe would work a few months than be off for a while and work again, etc. while a supp employee. the plan is an elapsed time plan, so it would seem that it doesn't matter if person worked 1000 hours during this period. gary

say a plan uses elapsed time method for service credit. for eg. date of hire is 1/3/89 and there were severances and starts w/r/t employment. generally due to the part time or temporary status of employment. during the time from 1/3/89 - 2/17/2001 there were no severances of 12 months or more. under the elapsed method it would appear all service s/b counted for all purposes. perhaps the breaks could have been excluded for accrual purposes if it specified, but it did not. any observations? the plan only gave credit from the point of regular full time employee. but the employee was employed prior to that designation and it would appear s/ have received credit for that period also. thanks, gary

often plans exclude certain classes of employees such as union or hourly, etc. however, it seems that part time employees and the like cannot be excluded if they meet the service requirement as it would be an illegal way to keep them from joining the plan 1.410(a)-3(e)(1). and if it is an elapsed time service method plan then the part time employee would be required to participate at same time as full time employees. a plan i reviewed excluded supplemental employees (and they worked a full 40 hour week) for eg. it seems on the same basis such an employee s/ not be excluded for that reason if they would otherwise be included in plan. this would have effect of increasing permitted max service condition. so at first blush i disagree w/ the exclusion of such employees. any comments? thanks gary

there have been lawsuits in situations where an employee was promised a benefit and then the sponsor says it was a mistake and s/b less. some courts have upheld the incorrect benefit due to reliance on such a benefit. does or can this apply when a pensioner has been receiving a pension for a few years and then the sponsor says there was a mistake and it s/b lower? i.e. can the potentially incorrect original benefit be upheld? thanks. gary

in looking over an individual's pension entitlement. company A merged into company B on 1/1/95. accruals after 1994 are based on the cash bal provisions of the company B plan. employees of company A prior to merger have 12/31/94 benefits grandfathered and receive additional separate accruals after 1994 under plan B. 12/31/94 plan A AB is also converted into a cash balance and receives only interest credits and at ASD the balanace is compared to pv of 12/31/94 AB. the cash bal in plan A gets 11% int credit while employed and 8% int credit after term and prior to ASD. using 11% for actives and 8% for terms seems to violate some cash bal requirements. for one thing it seems to now fail the 411(B) accrual rules and according to 96-8 it seems to result in an impermissible forfeiture as mandated in 1.411(a)-T for understating the post termination interest credit rate. so, bottom line it would appear the plan s/b required to maintain 11% after term as well. the plan paid the term employee the pv of 12/31/94 ab plus the plan B cash balance at ASD. however, if we take the plan A cash bal, increase it at 11%, convert to age 65 annuity, the pv of such ben is greater than the pv 12/31/94 ab. so it would appear there could be a claim for additional benefits for this individual. any other observations?

about ss level options. i haven't looked this up, but my impression is that the ss level benefit s/b act equiv to the normal form based on plan act equiv and that 417(e) would not be applicable in this case.

say a participant retires at age 66 with a total ben of 5,000; where 4,000 is from qual plan and 1,000 is from non qual plan. say he earned more than 401(a)(17) limits. and say his age 65 total ben was 4,800 and act increased to actual ret would be 5,400. and his age 65 qual ben was say 3,700 and act increased to act ret would be 4,400. assume no suspension notice provided. clearly, the act increased qual ben is still less than the total age 66 ben. so in effect, he is receiving an amount greater than act increased qual ben. but act increased ben in total is greater than actual ben in total. the question is, can the suspension requirements and thus the act increase requirement be applied to the total benefits? thus meaning that it would apply to the non qual benefits. my first impression is that since the total ben is greater than act increased qual ben, then no additional benefits would be statutorily required. any thoughts?

harry o, tell me about the new 411(B) proposed regs? i know of proposed regs that explained the annual actuarial increase to plan benefits, but was has since come down the pike? apparently you say some courts are not giving the actuarial increase when the suspension notice is not provided. thanks gary

can anyone please forward me a copy of the proposed cash balance plan regs or know how i can find them? thank you.

if the plan states that it provides the act equiv. i don't think a suspension notice would preclude that provision. unless plan were amended to provide suspension and it removed the act increase provision. as far as 415 goes. i have never had to deal with that for an act increased pension. and i am not sure if you can exceed 415 under these circumstances. maybe you can.

a plan converted a db plan to a cash bal plan eff 1/1/2001. the executed plan doc is 12/27/2001. apparently there was a prior version of such cash bal plan (also w/ eff date of 1/1/2001) that may have been in effect from 1/1/2001 until 12/27/2001 when current version was executed. the issue is that under first cash bal plan, the act equiv converted cash bal to annuity in such a way that pvab was greater than cash bal. and in subsequent plan the act equiv converted cash bal to an annuity such that pvab was less than cash bal account. plan paid cash bal account in all situations. question is: should the accd ben under prior act equiv be preserved through 12/27/01 and thus if pvab greater (using old act equiv) than cash bal, then pvab s/b paid? or can plan retroactively apply the 12/27/01 amendment eff as of 1/1/01 and not be required to pay pvab under old and greater basis? look forward to other interpretations.

the only documented authorization that requires interest credits after termination that i know of is irs notice 96-8. and apparently law suits have been won in favor of the plaintiff, to uphold and follow 96-8.

say an individual is an S corp. no other employees. if on the individual's 1040 he shows S corp income of say 50,000 and no other compensation. can the 1120S make a ret plan contribution for that individual (to either a DC plan or a DB plan) and can the individual make a 401-k salary deferral? thanks , gary

say an individual is an S corp. if on the individual's 1040 he shows S corp income of say 50,000 and no other compensation. can the 1120S make a ret plan contribution for that individual and can the individual make a 401-k salary deferral? thanks , gary

a plan froze benefits at 12/31/82. the formula at that time was a ss offset. they determine the ss ben based on the law in 1982. the plan discounts at 5% per year and uses level pay after 1982 until age 65. say person is age 50 at 12/31/82. my question is should the PIA be multiplied (or increased) by the 7.4% COLA of june 1982? my feeling is that a participant's PIA is not increased by COLAs until and after he reaches age 62 and not prior to that point in time. so in this case the COLA would not be applied.

my initial reaction to this is that if the person was rehired prior to the parity rules or even prior to ERISA, then it may be possible that the Plan is able to not consider the pre break service. my feeling is that these rules would be addressed in 411.

your conclusion makes sense to me. when does or did this new mortality table take effect for lump sums under 417(e)? and can you send me a copy of the rev rul? gary

i don't believe i have that notice. do you k now where i could get it? thanks, gary

does anyone know where i can obtain regulations that allowed employers to use 120% pbgc rates for distributions over 25k? i need to research 411d6 cutback issues. i.e. i imagine there is a point in time when the pvab of accruals must be maintained at 100% rates. i suppose, the plain wear-away approach can always be used. gary