Hojo

I found an old topic in the Distributions section. http://benefitslink.com/boards/index.php?/topic/25367-power-of-attorney-question/?hl=waiver

I am currently dealing with this situation so any updated thoughts would be great.......

This may belong in the istribution foru, but it's for a DB plan..... We have plan that is terminating and a participant wants to take their LS, but needs the spouse waiver of the QJSA. The spouse is currently serving in Uganda for the next year and not reachable and the participant has a full power of attorney. I'm assuming that the participant can sign as the spouse and attach a copy of the power of attorney for the file...... Do you think this is enough?

Should be: Annuity Conversion = 1,763,000 / Min (149.07, 156.04, 176.30 * 1.05) = 11,826.66 176.30 * 1.05 part is eliminated for small plans and hasn't been applicable for a few years now... IFYP

Also, got a repsonse from the PBGC regarding this question.... The PPA statute does not show how the 5 year average should be calculated, but it does say that the 5 year average rate should be used after the plan's termination date. The PBGC proposed regulation and IRB2010-48 each give plan practicioners an idea as to how to calculate the 5 year average. From an audit perspective, we have accepted both methods. If you follow IRB 2010-48 under page 793 (plan termination section), the guidance says to use interest credit rates for less than 1 year length adjusted and weighted proportionately. I belive that you example below will follow this method. Since the plan terminated 04/30/2011, the 5 year average will be based on the interest crediting rate will be the average of (2011 rate X (4/12) +2010+2009+2008+2007+2006rate X(8/12)) all divided by 60 months. The 5 year average rate will be used after 04/30/2011. If you follow the PBGC proposed regulation, the guidance does not count the partial interest crediting years. When the plan terminates mid-year such as 04/30/2011, we will use the 5 years of (2010, 2009,2008,2007,2006) and this average will be used for interest crediting periods after 12/31/2010 instead of 04/30/2011. Both methods are appropriate and for our audits we will check that a 5 year average interest crediting calculation was used when the plan defines the interest crediting rate as a variable rate. At some point in time, when the PBGC regulation becomes final, we hope that plan practicioners will used the PBGC method in the proposed regulation.

Not totally because I'm not saying to freeze the rate, but to follow the terms of the plan. Meaning that if it were a variable rate (as assumed) and the actual earninngs were 25% one year and 2% the next, you would still move on to the 2%, not freeze at the 25%, until the plan was paid out.

Yes, this is assuming it is a floating rate. I still don't get why the regs didn't just say that the interest crediting rate continues as defined in the plan until the balance is paid. Thats seems much more reasonable and easier that coming up with a 5 year average weighted average dependent on the plan termination date..

I know this has been brought up before, but I can't find any examples and I'm looking for some clarification. I’m hoping that you can help me with a question since it was brought up during a recent audit of a termination of a cash balance plan.　 It is specifically in regards to IRC 411(b)(5)(B)(vi)(I) and the 5 year average of interest crediting rates and when/how they apply.　 This is a purely hypothetical example. In the following example, how would the Cash Balance Account be determined as of 12/31/2013? Plan Term 4/30/2011.　 Cash Balance Account as of 12/31/2010: $1,000 no more pay credits. Interest Crediting Rate as defined in plan 2006: 4.50% 2007: 4.50% 2008: 4.50% 2009: 4.50% 2010: 5.00% 2011: 6.00% Would you use the 2011 rate of 6.00% for 4 months of 2011 and then the average for the other 8 months of 2011 and then 2012 and 2013 (ie, 6.00*4/12 + 5.00 + 4.50*3 + 4.50*8/12)? Or would you use an average for all of 2011-2013 (ie, 5.00 +4.50*4)? How would this change if the plan term date were 12/31/2011? Thanks for any help you can provide.

Can someone post a response? Because googling it just gives lots of results about a 4th 50 Shades of Gray book and my work doesn't like those links very much.....

Wait wait wait....I'm going back to original question on this..... How can the total outstanding balance be negative? Doesn't the total outstanding balance have to add up to the unfunded???? I can see a positive total outstanding balance and a negative amortization, but again, how is the total outstading balance negative.

I'm guessing by the vague question that he means only the owner is 100% vested. However, I think even with a freeze that participants can accrue vesting service. Otherwise, I have no idea what the OP could be questioning.

Check your software. If it's relius, you may have hit the bug that is producing faulity EIR's (usually the FT and TNC are correct, but its derivation of the EIR is messed up). You have to undo and rerun a few times to get it out of it.

You divorce settlement was 50% of your accrued benefit during time married. As the updated QDRO (correctly IMHO) defined, this included accrual into any early retirement subsidy. There's really nothing you can do becuase likely otherwise your DRO would not be qualified. This is all just my opinion and I'm sure you could spend plenty of lawyer fees to fix it in your favor, but, to me, it seems like you're trying to reneg on the original idea of 50% of your accrued benefit. For example: Plan: NRA - 65 Unreduced at 62 if Svc at retirement > 10 5% per year ERF otherwise Total svc 20 years Married 10 years Total Age 65 Ben $2,000 Age 65 for 10 years married $1,000 Your Age 65 Accrued Benefit accured while married : $1,000 a month Should your ex get $500 at your age 62 or $425? You qualified for unreduced while married. She should get the unreduced amount.

Are there any other requirements or pitfalls we should be wary of if we advise our client with this? Also, as an extension ofthe question, if the Canadian entity purchases a US entity and wants to maintain the plan in place, can they (assuming the trust caveat you already mentioned)?

I was wondering if anyone had any experience with this.... We have a Canadian corporation that wants to have a US plan for its US employees. There is no separate US entity. Can this be done?

Is there any negative to filing a 5558 and then filing the 5500 before 7/31? Do you still have to check the extension box?

(a)

If it is a pension plan that is subject to the PBGC and must issue an AFN, then yes, they do need that information. If it is a plan that does not issue an AFN, then they don't really care all that much.

Method 1 is the correct approach.

I don't think that there are regulations for EOY valuations reagrding this yet, but all of the examples that I have seen so far use FT + TNC = Liability AVA + Cont discounted for interest - Balances using actual ROR = Assets AFTAP = Asset/Liability FTAP = (AVA - Balances using EIR)/FT

Technically correct, but why would you do that?

Yes. Once they are a participant, they would vest to 100%. You don't need to be vested to be a participant.

I am simply going to administer the plans in the most beneficial way to the participants (the laws are written to protect a participant's benefits). I think one issue you may run into is when a participant is married and works in a state that allows same sex marriages and then retires to a state that does not (Florida comes to mind). My personal opinion is that the spouse is still due benefits based on the working life and legal marraige even if the state of florida does not recognize it.

Personal opinions without going into specifics - The state of limbo left by the decision of the SCOTUS is going to be a MESS! Each case will be dependent on the state in which the participants live and whether that state recognizes their marriage or not and potentially the time periods they lived invarious states. Basically, to simplify things, I think we should abide by the most conservative approach that benefits the participants which is to assume that any spouse is a recognized spouse under the law.

http://www.pbgc.gov/docs/smallbusinessguide.pdf "Professional service employers are firms owned or controlled by professional individuals who principally provide professional services. "Professional individuals" include physicians, dentists, chiropractors, osteopaths, optometrists, other licensed practitioners of the healing arts, lawyers, public accountants, public engineers, architects, draftspersons, actuaries, psychologists, social or physical scientists, and performing artists."