Blinky the 3-eyed Fish

And of course follow this sage advice: Vitanda est improba siren desidia

That's an argument you could make, although I wouldn't. I propose the earned income is earned ratably throughout the year.

Of course the actuary and auditor should have input since the auditor will be the one creating the financials and the actuary will be the one making the yield curve calculations.

1. I don't agree 3. No. 4. You will get different answers on whether or not a required contribution that is not deductible due to lack of sufficient earned income is indeed deductible in future years. I believe it should be.

No.

IMO assigning costs on the IA method is largely inappropriate if the goal is to match expenses versus payouts, and if you are talking about a group of docs, that most certainly is the objective.

I agree with your methodology.

The rollover monies can be participant directed. The plan document should spell this out. They will not affect the valuation whatsoever.

You know there are two statutory formulas allowed. The other is X = P(AB+D) - D. If you plug in the numbers from your example you get $61,600. But as far as which is better than the other, I personally think the first formula is. The second formula is vesting on earnings related to the non-vested balance.

You can't make deferrals from no compensation, so they get returned. You also have a 415 violation assuming all of the deferrals are not catch up eligible.

Since Company A has an 85% ownership of Company B, you clearly have a parent-subsidiary controlled group. Therefore, you don't have a multiple employer plan and just have one big TH test.

No chart, but I will give you a simple age 52 calculation. Since there is no increase in the dollar limit from age 62 to 65 you certainly get a higher contribution assuming age 62 retirement, so I will give you that number. I am assuming a lump sum with AE 5%/94 GAR and using the latest 10/08 transitional PPA rates. I am also assuming the dollar limit is the limiting factor and am not attempting to calculate a maximum deductible contribution under 404(o). EOY 2008 Max Benefit = $185,000 * .1 * 1/12 = $1,541.67 $1,541.67 * 145.4707 (94GAR at 5.5%) = $224,268 $224,268 / (1.0615^10) = $123,472 For now until possibly removed by tech corrections, I would compare that number to the 105% rule, which I get to be $123,419. AE yields a higher amount. Take the lesser of the three = $123,419 is my simple assumption funding amount.

Yes, that's correct. I am the victim of late-night posting.

The maximum employer contribution amount is $13,800 in the DC and $57,500 in the DB.

You have two choices initially in how to value the premium funding target, 1) the alternative funding target which should yield the exact same vested liabilities as your actuarial valuation, or 2) replace segment rates used in the valuation with PBGC segment rates. Now I have a different opinion that SoCal about valuing the lump sum for the premium funding target under #2 and here's why. The lump sum at payment date is the greater of plan value or the value determined using the valuation segment rates (not actual 417(e) rates if effect). That value is then discounted at the appropriate single segment rate to determine the funding target. Now that you are valuing the benefit for PBGC purposes, it makes the most sense to me to replace the valuation segment rates with the PBGC segment rates in both determining the lump sum at payment date and for discounting.

You are certfiying to a percentage based on a set formula of liabilities vs. assets. Based on that certified percentage, the CB is burned or not. I disagree you are certifying simply to a percentage. I believe all the examples in the proposed regs. follow this methodology.

I think you do need to recertify since you certified to a percentage that is no longer true. The certification doesn't factor in the credit balance burn. The burn happens after the certification.

Why yes they do. 1.430(h)(2)-1(b) (b) Interest rates for determining plan liabilities-- (1) In general. For purposes of determining the target normal cost and the funding target for any plan year, the interest rates used in determining the present value of the benefits that are included in the target normal cost and the funding target for the plan are determined as set forth in this paragraph (b). (2) Benefits payable within 5 years. In the case of benefits expected to be payable during the 5-year period beginning on the valuation date for the plan year, the interest rate used in determining the present value of the benefits that are included in the target normal cost and the funding target for the plan is the first segment rate with respect to the applicable month, as described in paragraph ©(2)(i) of this section. (3) Benefits payable after 5 years and within 20 years. In the case of benefits expected to be payable during the 15-year period beginning after the end of the period described in paragraph (b)(2) of this section, the interest rate used in determining the present value of the benefits that are included in the target normal cost and the funding target for the plan is the second segment rate with respect to the applicable month, as described in paragraph ©(2)(ii) of this section. (4) Benefits payable after 20 years. In the case of benefits expected to be payable after the period described in paragraph (b)(3) of this section, the interest rate used in determining the present value of the benefits that are included in the target normal cost and the funding target for the plan is the third segment rate with respect to the applicable month, as described in paragraph ©(2)(iii) of this section.

Well you are correct (see 430(h)(2)(B)(i)). (i) in the case of benefits reasonably determined to be payable during the 5-year period beginning on the first day of the plan year, the first segment rate with respect to the applicable month, This makes absolutely no sense considering the segment rates are determined based on the valuation date. I chalk this one up to another PPA malfunction.

Some would argue that the assets are reduced by the contribution plus interest credits not just the contribution. You definitely do that for 2008 but again, some would argue that for pre-2008 as well.

Val date.

And we are at about 75% too (actuarial approximation). I am closing the poll. I care no longer.

I did too. Good thing. Now I can sleep at night. Oh wait, fish don't sleep. Uh..., I will resume swimming in water laced with my fish dung.

And now we have this. http://www.irs.gov/pub/irs-tege/se0908.pdf I don't like the material change caveat, especially in this market.

Dave, I have a problem too, although it is different than the others. The Benefitslink website came to life and stole my identity, credit cards and my car. Can you tell it not to do that anymore?