LIBOR

does anyone know where I can find instructions/forms to apply for a waiver of the min funding standard on behalf of a client ??

DB practitioners know that, in addition to amortization bases, the reconciliation account is eliminated when the ERISA FFL is reached ; but how do we know that ? officially that is ?? Anybody have a cite ??

Following along with FASB topics, has anyone seen/heard anything recently regarding the cost method to be used for Cash Balance plans. PUC,TUC, or something else ? there was a fair amount of discussion on this at the EA meeting in March.

thanks for the affirmation Blinky !!!

I'm running the ABPT using the "annual method" and have 2 plans in the testing group - an active DB with 2 HCE's and 10 NHCE's and a "frozen" DB with 4 HCEs and 20 NHCE's ( also, the "frozen" plan was frozen before the testing year ) . Question : In determining my actual benefit percentage per 1.410(b)-5© do I divide by 6 for the HCE's & 30 for the NHCE's or different numbers like 2 & 10 ? Also, assume the number of HCE's and NHCE's given above are the appropriate numbers.

I was just reasoning that if I make an assumption that all eligible for the window will opt for it, i.e. a new assumption regarding the incidence of retirement, then it would give rise to an assumption base. Granted, the reason for the window is to reduce costs and so the sponsor would also prefer a 30 year base but it was just an academic type query. My question also draws on information from earlier posts on the topic - I believe Andy H had some very good questions in early 2001 on this very topic. Don't know if he resolved his questions but would be interested in knowing his final approach and methodology ??

thanks Pax ; my gut leaned towards reflecting the liability change as an amendment base but a colleague argued that it could also be viewed as an assumption change base. i.e. 30 year vs 10 year . I was just wondering if it's the 'ole coin flip or is there a reason it needs to be an amendment base ?

Our client is opening a 3 month early retirement window via plan amendment effective 1/1/2004; should the 1/1/2004 valuation reflect an assumed number of takers or should it reflect actual. Also, if we go the assumed route is the change in liability an assumption or plan change ?

Could someone provide a "cite" for the 2 year rule ??

great ! thanks Blinky !!

I agree w/ mwyatt also; but I've been going from memory ; mwyatt, would you happen to have any cite(s) or even a GreyBook question or an EA meeting outline that would additionally support our common contention regarding the need for a 1/1/2003 valuation given the fact pattern ? Thanks again !!!

Andy, just curious , what is FWIW ??????

Yes, my typing error ; instead of 12/31/31 on the 3rd line it should be 12/31/2002. If they were sufficient, we'd probably get a funding pass so to speak per Section 4 of Rev. Proc. 2000-40. thanks for the reply !!!

Situation : 204(h) notices are sent timely last December (12/13) announcing a proposed plan termination effective 12/31/2002 but the plan is not amended to freeze accruals as of 12/31/31; the 204(h) is also used as the 60 day NOIT with a proposed termination date of 2/15/2003; a Board resolution is also signed on 12/13/2002 resolving to terminate the plan effective 12/31/2002. The plan is insufficient & I contend that a 1/1/03 valuation needs to be performed w/ costs pro-rated for the period from 1/1 to 2/15. The consultant for the termination work asserts that the 204(h) and the Board resolution are sufficient to end my company's work as of 12/31/2002. Who is right ??

I'm currently involved with a municipal DB plan that calls for mandatory ee contributions. With limited understanding of 414(h)(2) my impression is that the plan can be amended to replace or augment the mandatories with a "pick-up" arrangement. We're currently funding the plan under the Projected Unit Credit method and the annual suggested Town contribution is comprised of net service cost ( i.e total service cost net of mandatories) plus an amortization of the unfunded. Since the "pick-ups" are employer contributions, they would just go towards the suggested Town contribution described above, correct ?? And lastly, if the "pick-up" arrangement augments the current mandatory arrangement & if the mandatories are a % of base pay, then base pay would include the "pick-up" amounts, correct ??

I'm currently involved with a municipal DB plan that calls for mandatory ee contributions. With limited understanding of 414(h)(2) my impression is that the plan can be amended to replace or augment the mandatories with a "pick-up" arrangement. We're currently funding the plan under the Projected Unit Credit method and the annual suggested Town contribution is comprised of net service cost ( i.e total service cost net of mandatories) plus an amortization of the unfunded. Since the "pick-ups" are employer contributions, they would just go towards the suggested Town contribution described above, correct ?? And lastly, if the "pick-up" arrangement augments the current mandatory arrangement & if the mandatories are a % of base pay, then base pay would include the "pick-up" amounts, correct ??

This is a big plan - would the responses be different now ??

Exactly ! Logically it should become easier to pass ! Each rate group that includes this NHCE would now have a higher accrual rate for him ; I was just wondering if the amendment that increases this NHC's benefit is a triggering event for a test in the eyes of the IRS??

I have a newly acquired DB plan that covers HC physicians and generally NHC office staff; the physicians have a better formula and so the general test was required and passed in 2001. Question: the client wants the plan amended to provide a better formula for 1 particular NHC member of the office staff ( who has a unique job description) . Would this amendment neccessitate immediate general testing or could it wait until 2004 ( i.e. 3 years from 2001 ) ???

Does anyone know where I could find a good data collection "questionnaire" for DB 410(B) testing ?

thanks pax ; that Code section was perfect ; I've been immersed so much in the 401(l) reg. that I didn't think to go to the Code for the guidance.

I'm doing a DB val w/ assumed retirement age of 62 & an integrated formula w/ integration level at CC; I'm projecting the wage base ; in calculating CC at SSRA, would I average the 35 previously determined wage bases before SSRA or would I assume the projected wage base at 62 would continue to SSRA and then average this new array of 35 wage bases ?

MGB has a good point & we're starting to diverge into the financial planning arena a little but it's true that we'll only be able to measure which option (annuity or lump sum) was better after we die ! True ???

Pax - I jus got it "By the Way" ; Rev.Ruling 2001-62 right ?

Keith - I think we have the option of explicitly funding for the lump sum option through assumption selection or funding for it prospectively after it is utilized via the gain/loss amortization. For a client with demographics that indicate utilization of the option in the distant future, prospective handling might make more sense after a cash flow analysis. The different mortality tables is a good refinement. Pax, what does BTW stand for ???? And again, thanks again for the feedback !!!!!