Gary

A person has the following pays: 1995 50,000 1996 60,000 1997 70,000 1998 55,000 (terminated on 10/1/98) plan uses a 3 yr avg. Is it legal to ignore the 1998 compensation in computing avg salary, eventhough it would produce a higher avg, because the plan says it only uses complete years worked? Or is it really just based on what the plan says? Interested in other opinions.

A large plan has surplus assets. Can they transfer part of the surplus out of plan to cover retiree healthcare costs? Where is this addressed in the law? What notfication or other requirements exist or where can they be found? Look forward to comments. This plan is not being terminated, but they plan on vesting all participants at the time of transfer.

In response to your comments Pax, the plan document refers to PBGC mortality. So what is PBGC mortality? If you look in the regs PBGC mortality is Table I of Appendix A of Part 4044. Which happens to be GAM83 males (a 6 yr sb is required for females). So would it seem reasonable that that is the mortality table that is applicable? Or s/ it be something else?

An individual receives a lump sum in 1995. The plan requires 50% female and 50% male PBGC mortality. In 4044 of regs the PBGC mortality table is the GAM83M table. This appears to be as a result of GATT. Do you think this is the referenced mortality table, even if the plan has not amended its lump sum provisions for GATT? ANy thoughts?

David You're right it's not open to the public. However, I'm trying to think of a way to locate a name (no one in particular) of a former employee of a particular company because there appears to be a problem in the way the company calculates the lump sum on behalf of some former employees. I'm just brainstorming and am curious to see if anyone had any ideas.

does anyone know of a way of locating (finding the name of) a former employee (not anyone specific, in general) or a current employee of a large company. I imagine if I had an SSA form (from Schedule b) that would be one way. DOes anyone have any other suggestions? It could be any former or current employee.

It would appear to be fine if the person was over the normal retirement age. The fact that the person is working only part-time should also work in favor of continuing to receivie the pension. However I would certainly look in the plan document to see what is said about in service annuities and issues related to part-time status.

Prior to GATT, Plan used PBGC rates at time of dist. Plan amended to use GATT as of April prior to plan year. Transition technoque is to use GATT rate as of 2 months prior to dist. (correspond w/ pre GATT timing) and as of April prior to plan year of dist. Whichever rate produces higher benefit. Say plan was amended 11/1/96 and adopted 8/14/97. If person is to receive lump sum as of say 12/1/96 should it be computed using pre GATT basis, since it was not yet adopted? My undetstanding of law is that you use new GATT technique transition from 11/1/96 through 8/14/98, but how could one use GATT technique prior to adoption of amendment? Any thoughts out there?

"Final Avg Earnings" means avg monthly amt of Compensation during 3 consecutive yrs, within the last 10 calendar yrs prior to termination, which shall produce the highest avg. Participant works from 1977 till 9/1/97. What period can be considered in determining avg pay?

say a plan makes a mistake in a participant's pension. Is there a statute of limitations to protect the plan sponsor? I have thought that it might be 6 years, since my understanding is that a plan need keep participant records for 6 years. Anyone have any comments or knowledge in this area?

My understanding is that current regs provide that if a plan does not provide notice of suspension of benefits, then they must provide for the greater of the actual accrued benefit at late ret. or the act. equiv. of such ben. Any other thoughts?

Aside from the RPA '94 rules. Say in the history of a plan the company amends from time to time the definition of actuarial equivalence. Is it necessarily true that the lump sum a participant could have gotten at the date of change grandfathered in some way. It doesn't appear to always be stated in plan documents.

Say a company discovers that they made a mistake and they gave al retiree an extra $100 per month. Say the company discovers this several years after the person began receiving a pension. Can they correct the mistake and then pay the smaller benefit? Has it been done?

an individual retired and took a lump sum. several years later it was determined that the amount was 5k too little. however the person has now deceased. can the spouse or estate get the make up payment or is there any recourse to anyone's knowledge. A reference would be appreciated. thanks

Richard if you respond to this topic, I am interested in having your email address. I thought on occassion we would be able to correspond in a little more detail on certain occassions. Thank you very much if you are interested. My email is mevoco@mindspring.com. Thanks, Gary

Say if a plan has a 4% allocation and a 5% interest and we do a one man unit credit valuation. No assumed turnover or pre ret mortality. Then if person is still active (and earned $100,000 per year) one year later, the only gain or loss can be due to investment and the person would get an allocation of $4,000 plus 5% interest credit. Is there a way for a liability gain or loss? It almost seems that a liability gain or loss could only occur if he took a payment option other than the assumed option of lump sum (which is set equal to account balance). Or at least a liability gain due to termination earlier than expected would cause an equal asset loss and be a wash.

Say a CB plan provides for allocation credits of 4% and interest credits of 5%. When doing a actuarial val. can it be done directly with those amounts stated above (like a money purchase plan) as the minimum funding requirement or does each credit have to be converted to an annuity and then valued as a present value of the annuity accrual? For example if total compensation was 1,000,000, would the funding requirement be $ 40,000 (@ 4%) plus interest credits or do we have to convert to an annuity. When providing top heavy benefits is it true that then we need to convert the 2% accrual to a dollar allocation?

Richard - a couple of comments w/r to you response. 1) Isn't it true that the lump-sum based on the frozen benefit would change due to a change in interest rates and an increase in participant's age and could go up or down? 2)Isn't the accrued benefit based on the account balance at 65 (assume no early ret subsidy) converted to an annuity (of course grandfathering the frozen benefit)? As opposed to the frozen accrd benefit plus future account balance converted accruals? Or does it depend on the plan design? 3) And based only on the account balance, isn't it possible the lump sum could be greater than the account, due to 417(e) lump sum of accrued benefit? Like to hear your thoughts Gary

If say a 45 year old person has a cash balance account of $100,000, is that what the lump sum would be if he terminated? Or do you have to project account to 65, convert to an annuity and then determine lump sum of the annuity? And if he wanted to receive an annuity at 65, would the account be credited with interest (based on current year rates) to age 65 and then converted to an annuity?

I am in the middle of researching this but wanted some thoughts. I hear of cases where an employee has an opening cash balance account that is less than their pvab from old plan and that they will not accrue for a long time. And that this happens to older employees. Is it simply due to different assumptions, such as a higher interest rate for cash bal conversion? And are there restrictions as to what assumptions are used for opening account conversions?

This is a db plan with a little < 100 lives, is t-h and is considering a cb plan. Assuming it continues to be t-h then my point is is that the account bal would then have an equiv annuity benefit and that a 2% accrual is required and then the new annuity could be converted to this equiv acct balance. That is my impression at this point. Thanks Pax

pax, i understand what you're saying and i will look further at regs, but since a cb plan accrues as % of pay instead of in an annuity form, i wasn't sure what the required accrual was. it appears to me that the employee may have to get a cash accrual equal to the act. equiv of a 2% of pay annuity accrual. does that make sense to you?

If a top heavy db plan is converted to a cash balance plan, does anyone know of minimum required accruals for such a situation? I have not seen this addressed anywhere.

a plan uses fractional unit credit plan. Except that it is integrated by cov comp. it seems that someone making more than cov comp can accrue more than 4/3 of the benefit someone else would. does this seem like a plan that doesnt meet accrual rules or does anyone have an observation about this type of plan?

where exactly in the regs is this subject addressed? In the meantime I will start looking.