Gary

I have read that in determining PIA, you compute AIME by using earnings history prior to year you attain age 62. Is this true, or does anyone know of using earnings after age 62 when determining AIME?

Employee A works past age 65, but continues receiving accruals. At age 68, her company is bought and her old company pension is frozen. The old and new company never provided a suspension of benefits notice. Does anyone have any thoughts as to whether this employee should be getting an actuarial increase to her old plan frozen benefit for working beyond age 65 and not receiving a Suspension Notice?

a former employee receives a lump sum distribution of his pension a few years ago. Does this person still have rights under ERISA 104 and 209 (I believe) to receive copies of plan documents to review his pension entitlement? Or is the plan sponsor under no obligation to this person. This is under the assumption that the statute of limitations has not expired.

A plan allows for early commencement for terminated vested participants. The terminated employee can receive his pension as an annuity upon termination or as early as age 55, if he does not commence at termination. The plan also provides for lump sum payments upon termination. This is a pet peeve of mine. In computing the lump sum, the company determines the factor as if the pension is assumed to be payable at age 65. My feeling (playing devil's advocate) is that why not pay a lump sum that is the greatest of the lump sum determined as either: 1) payable at age 65 2) payable immediately, with applying ERF factor 3) payable at any age from 55 to 65 In other words the lump sum determined as payable at age 55 with an ERF of .48 produces a larger lump sum than the amount determined as payable at 65. What are your thoughts w/r to this more aggressive, but seemingly reasonable approach? PS I should say early commencement factor, since it would not be an early retirement factor. Take care Gary

Is anyone familiar with Rev Rul 84-45. It has to do with assumptions in connection w/ computing estimated earnings history when determining SS PIAs for plans that incorporated PIAs. I'm wondering if anyone knows any of the specifics w/r to what are acceptable assumptions to use based on this ruling.

A plan has a formula of .9% below CC and 1.4% above CC. Seems fine at normal retirement. However at age 55, based on the ERF factors the disparity is .32, but the maximum is .316 for someone w/ SSNRA of 67. Does this mean that this plan does not pass 401(l) and does not meet a nondiscriminatory safe harbor plan formula?

Say a person has a SSNRA of 66 and retires at age 55. Say his accd ben is the limit of 135,000 and the 415 early ret maximum benefit is 60,000. It appears that we then would have to compute the plan early ret benefit and limit it to 60,000. However, should I take the 135,000 and multiply it by an early ret factor and compare to 60,000 or should I reduce the 135,000, since the plan NRD is earlier than SSNRA and then multiply the reduced amount by the early ret factor and compare it to the 60,000? Curious to hear any thoughts on this.

Beg. 1/1/2000 all plans must comply w/ the 417(e)(3) Gatt requirements. If a plan has yet to actually amend the plan do they just comply w/ Gatt operationally or do they still grandfather the PBGC rates as well as applying the GATT rates? Or does anyone have other thoughts?

Say a plan terminates and purchases annuities from an insurance company and later on a plan participant has begun to receive his annuity. A couple of years later on it is discovered that the participant should have received a larger pension, is there any recourse when the plan no longer exists? Anyone have any knowledge on this situation or a similar one?

Reponding to what Alonzo said. It appears that he is saying that if the amenment is not adopted by 1/1/2000 then the plan would be required to use greater of PBGC rates or GATT rates. My initial reaction was that simply the GATT rates would be a required minimum eventhough the amendment was not adopted. Do I stand to be corrected? I'll do some research myself.

My understanding is that if you do not amend your plan for GATT, then you continue to use the PBGC rates through the 1999 plan year. Then beginning with the 2000 plan year, you are required to use GATT rates operationally, even if you haven't drafted an amendment. I'm curious to hear other views on this.

I agree with what Keith said. Even prior to GATT you were still required to use the PBGC rates as a minimum (per 417(e)). Once Gatt rates are required then they are the minimum requirement, instead of the PBGC, unless collectively bargained plans have some different rules. And the plan non-PBGC rates are required to be preserved for all accrued benefits up to the time that the plan is amended to remove such rate.

I am a self-employed actuary and I am looking for other actuaries who would be interested in networking in order to go over and discuss technical issues (past and present). Please let me know if you are interested in corresponding on a as needed and frequent basis. Your email address would be appreciated. My email is mevoco@mindspring.com Thank you. gary

Employer wants to implement db plan for 1999. plan is required to be written (401(a)(1). To my knowledge primary provisions can be adopted prior to end of year, then full document drafted later, to implement prior to end of 1999. Where would this allowance or leniency be found? i.e. what citation or section of code or regs mentions this.

the payment was made in 1999. And your point about the tax issues is being used. So we'll have to look into othis closer.

A company found out that it overpaid someone by the tune of $40,000 w/r to his lump sum. Can a company require the individual to pay back this amount? WHat can the participant do? Any thoughts.

How long is a plan sponsor required to keep data records of an employee afer they terminate and receive their pension? Either in form of life annuity or lump sum. It appears from ERISA 209(a)(1) that records must be retained indefinitely. i.e. as long as there is a chance that the data to calculate the benefit is ever potentially needed. Are there any thoughts w/r to this or to other factors affecting this point?

It would appear that the benefit could go down if pay decreases, but isn't avg pay defined over a period of 10 years? Where you could use earnings from several years past, thus maintaining the benefit based on the higher avg pay.

Does anyone interpret that ERISA 104(B) provides that a deferred vested, retired or luimp sum recipient can request for a copy of their benefit calculation? For the same group of participants stated above, how long does a company need to keep employee records that are necessary to compute the participant's benefit? This I believe is addressed in ERISA 209(a)(1), but I am not clear fot this group of participants.

If a plan terminates and purchases annuities with an insurance company, what is a participant's recourse if he believes that his benefits are incorrectly calculated? Would the insurance co. be on the hook? Or is it too late by then? Any thoughts out there? Any citing? Thank you. Gary.

The suspension of benefits notice was not provided. Your comments make sense. Any place in regs that might specifically address this type of situation? Perhaps I need to dig in 411. Any thoughts?

Keith I did read it and I am still trying to sort things out and solidify my understanding. I will say that I thought it implies that the opening balance did need to incorporate 417 rates as a minimum balance if plan did not provide for lump sum prior to conversion.

An employee turns 65 on 1/1/91 w/ a pension of 20 * 25 = 500/mo. The person retires on 1/1/94 w/ an accd ben of 23 * 28 =644/mo. The rate per month increased from 20 to 23 per month for each yr of svc. The person gets greater of age 65 benefit act increased or 644. My question is should the age 65 benefit be recomputed due to increase in benefit rate and thus be a pension of 23 * 25 =575 and have that amount act. increased?

A plan converts to cash balance plan. Opening balance is equal to present value of accd ben. The plan does not provide for lump sums prior to being converted. Is plan required to use 417(e) rates as a minimum? Any thoughts?

cash balance plan allows for lump sums. Is it true that the lump sum must be greater of acct balance and the value of the account balance projected to 65 using interest credit rate and then discounted to current age using lump sum interest rate. i.e. if interest credit rate is higher than the lump sum interest rate the lump sum would be greater thatn the acct balance? Also if the interest credit rate and the lump sum interest rate are variable, do you apply the rates in effect at termination and use those in the projecting and discounting? Look forward to any thoughts on this important subject.