newguy2012

Thanks, Frizzy. I just ordered their Retirement Plan Fundamentals I book. They have a new "RPF" designation if you complete volumes I and II and take the open book tests. I will finish those this year since there are no experience requirements and then move on to QPA/QKA/CPC designations over the next three years. Any recommendations on learning the purpose behind each rule relating to qualified plans? I find that if I know the purpose behind a rule and/or how it works in practice, I understand it better. And, anytime you think of anything that would be useful for me to know, feel very free to e-mail me. I'm hoping you guys on here will be let me benefit from your wisdom and experience.

Your pre-soap box comments make total sense. Soap box: I would kill to work for a company with a pension plan. Give me a promise of certainty over uncertainty anyday. We have a match at my company (which is owned by a big bank). Do you think I should seek out an annuity outside of a qualified plan? Is it worth it?

"If I take the annuity, I could have a stable stream of income for the rest of my life...bbbbbuuuuttttttt if I take the lump sum, I could buy a boat!!!" (Can you tell that I get excited when I get when client's ask me this question. Also, welcome to benefitslink New Guy. You aren't by chance Lance Wallbach, are you?) Yes I can frizzy. Thanks for that. I am not Lance Wallbach. Who is he?

OK. I will need to spend more time on this in order to understand. Confusing. It looks like 417(e) just deals with QJSA and QPSA but then it looks like it deals with lump sum distributions. If it deals with lump sum distributions overall, I guess this impacts the definition of actuarial equivalence in the plan, correct? or it could?

I am looking over 417(e)(3)(B) and wondering how this plays out in the real world and how 415(b)(2)(E)(ii) affects 417. From my understanding, the 415 section referenced above sort of sets a floor on cashouts? ("the interest rate (under 417e) shall not be less than the greatest of 5.5 %", etc). Is the cashout the 5k or less cashout or is it broader. Any light that can be shed on this would be helpful. As you can probably tell, I am so confused that I'm not even sure how to ask the questions. So, any help on understanding the Hows and Whys at a fundamental level would be greatly appreciated. Feel free to add any history of the law.

Ok, thanks. Actually, I am signed up for their three-day seminar in Atlanta next month, "401(k) and other qualified plans" It seems though they are not going to cover much DB stuff. But, I plan to take one of their achived webinars on DB plans. I will go to all of the pertinent seminars. I'm just thinking about how to put all of this info in my head, how to categorize it in the best way.

I did not know that about the IRA. In theory, the qualified plan could allow all non-5% owners to work way past 70 1/2 without the RMD, correct? I wonder if what would happen if the plan has a "5% owner RMD provision" but is silent on that. Is there a default rule or would the plan just fail to be qualified?

That completely makes sense. Your "half-hearted explanation" just helped me to understand the thing at a fundamental level. Was there a reason that participants were receiving more lump sums than usual? I thought they could defer for as long as they wanted? Most typically, this occurs when a job change or plan termination event comes up. The participant is not yet ready for living off their retirement funds, but they are forced to take the money. Not all are forced, either. In some situations, the participant is very concerned about leaving their money with old employers and want to have better control over the investments by rolling it into their own account. But couldn't they choose not to take a lump sum (assuming the amount was over 5k)?

Since you guys were so good at answering that question, I wonder if you have any ideas on how to put these qualified retirement plans in my head. I am thinking-meta cognitive. I have been going back and forth. Here are the options I came up with: I could: 1) Learn all the points of law, starting with 401 and organize in my mind that way, breaking it up between the types of plans; or 2) I could go over a pre-approved plan adoption agreement and outline each section and concept and learn it that way--and expland on the concepts as I begin to draft IDPs; or 3) I could just outline the 2011 cumulative list, adding sample language and explanations for each rule (and maybe outline the prior CL for cycle B plans (2006 cumulative list just to get a more recent historical perspective, etc). I work in document compliance. The guys are giving me time to learn this stuff, so it is no real pressure on me. I just want to learn it fast and learn it at a fundamental level. I want to move up quickly here. Thanks in advance.

Thanks. I will read the rule and see if I get what you are saying. It just so happens that I have the first book on my desk and have read a little. I hope to read the DB chapters over the weekend. I don't know if I heard about the other one. I will look in our library. Thanks.

Wow, you guys are just knocking these out of the park. I get it now. No longer is RMD just an intellectual concept, I get how (and why) it is used in the real world. Awesome.

That completely makes sense. Your "half-hearted explanation" just helped me to understand the thing at a fundamental level. Was there a reason that participants were receiving more lump sums than usual? I thought they could defer for as long as they wanted?

Can someone tell me if I am thinking fully and corrrectly about the concept of the mortality table and interest rates as they relate to actuarial equivalence and/or actuarial increase? I know that you would use these to determine actuarial equivalence when optional forms are involved. I just don't know exactly how they work. Well, I know how the interest rate plays into this, I think. That is, if the normal form of benefit is a single life annuity (and the interest rate is high (8%)) that means you will get less is a lump sum distribution than you would have if the interest rate were lower--because the the assumption is that you will invest that lump sum at 8% a year or something like that. And, I understand that the mortality table predicts the age of death and how that would affect funding; I guess I don't see how a certain table is chosen or if I need to know anything else about the concept. I guess the better question relates to actuarial increase: I have read that: An "actuarial increase must be provided under a defined benefit plan for an employee who retires after age 70 1/2." What is the difference between accrued benefit and actuarial increase of accrued benefit? I have seen language concerning late retirement that reads somehting like this: "a P's who continues employment after attaining NRA his benefit shall be the greater of continued accruals or act. eq. of acc. benefit." I can't wrap my mind around it. The I read that the late retirement benefit could be "paid as though the P had actually retired on the NRD." That seems weird to me. Can that be done? Please understand that I have plenty of people in my office who can tell me if I am right or wrong on something; I am just trying to learn this DB stuff to the point of really understanding it and being able to explain it to a novice--understanding at a fundamental level.

Can someone explain to me in laymen's terms how this Eligible Rollover Distribution works? Specifically, one of the transactions listed as ineligible for a rollover is where there are a series of substantially equal periodic payments: 1) Does that just mean that if you have a single life annuity and you are in pay status that it cannot be rolled over into a qualified plan? 2) RMD is listed too. Maybe if someone could help me wrap my mind around the concept of RMD, RBD, etc I would be able to understand this one more. I am assuming that if you get a RMD that it cannot be rolled over. Or, does it apply when certain funds have been marked as a RMD (before the distribution)? I don't even know if I am asking the right questions. Any help would be very much appreciated. I have many more questions today and in the months to come. I am hoping that you guys will be my teachers. It's not that I do not research these issues, it's that I like to learn things in a way where I could explain it to the average person.