Gary

An employee plans to terminate in December (prior to end of 1998). The employer says they do not have to make a 401(k) contribution on behalf of this person. Is this necessarily true and where are there Regulations addressing this issue?

The only thing that comes to mind is to make your own spreadsheet that incorporates many different mortality tables. Let me know what you come up with. I also would like to know if you have a tool for calculating Social Security Benefits. Thanks

If a plan provides an insured death benefit, is the funding such that the cash value build up is considered a plan asset, thus reducing the retirement benefit funding requirement, but where the total funding is greater due to the additional payment for the premiums? Any thoughts would be appreciated

A business owner wants to start a one person plan for 1998. Is it acceptable for this person to just open up, say a money market account, contribute $1 prior to 1999 and have this be designated as the pension trust? I know it is a very trivial qustion, but I have never actually implemented a new plan.

IRS prescribes the 83 GAM table for 415 and 417. How can it be explained that we use a table with the year 1983, when it is 1998? Curious to hear some thoughts.

If a plan is to have lump sums as a benefit option, how low is a reasonable interest rate for determining the lump sum value? That is how low can the rate be and still not be disallowed by the IRS?

A small company wants to have a db plan where a key ee with a salary of $1,000 (no assumed future pay increases) is to receive a projected benefit of $10,000/yr. , but the plan formula is proposed to be something like 150% of pay. How can they arrive at such a benefit under such circumstances? Even if 415 allows for such a benefit, it doesn't seem to work under this criteria.

a former employee would like to have his pension reviewed, but the employee terminated over 10 years ago. My understanding is that an employer must maintain records for six years, thus that being the period of time for the statute of limitations. Any comments as to if it makes sense to review this pension and what is likelihood of employer making a correction?

Pax, You point makes sense. It is a correction and bringing forward with interest seems reasonable, we are also trying to establish an appropriate interest rate, such as act equiv., or lump sum rate or some other rate. Thanks for your response.

It sounds like option 2 is really recomputing a lump sum based on the plan provisions w/r to lump sums as of date of corrected distribution. It seems like you suggest using an interest rate equal to act equiv in plan is better than PBGC, if the period is over say 6 months. Bottom line, is the choice of interest rate really a judgement call by actuary recomputing plan benefit?

I agree with the use of the actuarial equivalent rate, however in the case of a lump sum, the twist is that that rate is often the PBGC deferral rate, not the rate in the plan for other options. So my follow up question is for a verification that using the PBGC deferral rate (probably 4%) is acceptable?

if one wants to determine the social security portion of a plan benefit or compute soc. security directly what options are available? Assuming one does not have predesigned software.

if a lump sum is paid out, but is under paid by say $ 10,000, what interest rate would you use to bring the underpaid portion forward with interest?

when using the GATT mortality table does it mean you must use 50%/50% blended rates? If so, where do you obtain such a table?

if a plan fails 401(l) - does it have to be amended in order to remain qualified?

A plan provides for act increases for late ret. The plan changes act equiv in 1994, from an interest and mort table to a table of act increases w/ no reference to specific assumptions. A participant reaches age 65 in 1991 and retires in 1999. My feeling is that his act increased benefit s/b on old basis to 1994 and then perhaps on new basis (less generous) from 1994. The Plan just uses less generous new basis. Any thoughts on what is acceptable approach. Perhaps the old basis is only basis that s/b used since his entire age 65 pension was accrued before 1994. gary