Mike Preston

None of the above, in my opinion. Not only must the report identify the AFTAP it must explicitly state that the actuary is certifying it for the relevant purpose.

The former. Yes.

I'm not sure I understand what you are asking. Are you asking whether the previously issued valuation can serve as the basis for the calculation of the AFTAP, or are you asking whether the previously issued valuation can be relied upon by the plan sponsor as the equivalent of a certification of what the AFTAP is?

I have always treated it as B. PBM, that which is not prohibited, is allowable.

Teach me to take a phone call before uploading. My response was intended for the OP, not for the response. The response is spot on.

No can do.

But they are merely proposed regs. Surely it would rise to the level of a reasonable interpretation of the law if done for 1/1/2008, wouldn't it?

What AndyH said.

The Pro version will within a week. The big issue appears to be pre-retirement mortality. I have found, through informally surveying a number of people who have J&S normal forms in their plans, that there are two basic ways that people have been implementing pre-retirement mortality. I'm not sure whether 417 is clear as to which way is appropriate so I need to ensure that the program will be able to do it either way. The two methods in common use appear to be: 1) The "simple" way: decrement between current age and retirement age is based solely on the primary annuitant. If the primary annuitant is considered to have died, there is a forfeiture. If not, the annuity payable at retirement is a J&S at the elected percentage to a contingent annuitant whose age is the same as the current contingent annuitant's would be. 2) The "complicated" way: decrement between current age and retirement age is based on both primary annuitant and contingent annuitant. There are four states to value: a) both live to retirement age of participant: commence J&S b) primary annuitant only lives to retirement age of the participant: commence SLA to primary annuitant c) contingent annuitant only lives to retirement age of the participant: commence SLA of greater of J&S percentage or QPSA percentage to contingent annuitant d) both die: forfeiture The "complicated" version appears to provide for an increase of roughly 2% at 100% J&S over the "simple" version. I'm finished with the "simple" version and am working on finalizing the "complicated" version. If anybody implements pre-retirement mortality differently, I'd love to hear the specifics. Of course, the really simple way to deal with this for 417 purposes is to write your plans so that there is no pre-retirement mortality, but that won't help existing plans! Those who have already ordered the program will receive these sorts of minor updates to the program's capability without additional charge. mike

I know this flies in the face of efficiency, but is there any restriction on doing an ad-hoc 1/1/08 valuation for the sole purpose of certifying but keeping your contribution valuation on an EOY cycle? Its late and I'm tired so I apologize in advance for suggesting something that will increase the number of hours we have to spend dealing with a plan.

But even if you did, you couldn't.

Jim, all I want to do is laugh at Bill and then...and then.... you make my head hurt.

Interesting issue. I'm sticking to my guns that we deal with things as we always have dealt with things unless it is clear from the context that we should not do so. In this case, we have Revenue Ruling 77-2 to guide us as to what should be included in the valuation as of a specific date. The pre-effective date guidance has been scant so you can hardly be blamed for doing something reasonable. Keep in mind that there are consequences to one's actions in this arena that actuaries have not previously had to deal with too frequently. I would encourage anybody who has a plan where restrictions are a potential to engage an ERISA attorney OF THEIR OWN to help sift through the issues.

I think your write up is a fair one. I think what you are seeing was written before 430/436 were thrust upon us. It is pure conjecture which parts of 412 that moved will be subject to identical rules and which will have brand new rules to deal with. In the absence of clarifying guidance, though, assuming something that used to apply to 412 applies similarly to the new code sections shouldn't raise too many hackles. To pick a technical nit, I would say the NC is also pro-rated, but 75% of 0 is of course 0.

Submit plan termination, include the accrual in the 2007 figures you submit as applicable to 2007. Be happy.

Not today. Sorry. I'm adding J&S to my Present Value calculator!

Whatever the minimum required contribution is for the year, exclusive of carryover balances.

zimbo, zimbo, zimbo

Since the days of Guidry that issue has been hotly debated. I still say that if the state order says that THE proceeds are to be turned over upon receipt that there is controversy over the ability to enforce same.

I would treat it as a separate interest QDRO if the option to begin prior to p's retirement is elected. In other words, the fact that the QDRO appears to have language describing it as a shared payment QDRO is overridden by the fact that one of the options provided to the AP (and approved by the plan) is a separate interest. To cover your bases, you might consider, after folowing QDROPHILE's sage advice, writing a clarifying letter to the parties showing them what happens if the AP elects to commence benefits prior to the time that the Participant does so. Just make sure that the P is no worse off when he retires if the AP elects early commencement than he/she would have been had the AP waited and received a shared payment. This, it seems to me, is what would normally happen, so you should be able to at least see the finish line through the fog. Good luck.

Sometimes we disagree and sometimes we disagree strongly. My guess is that this is one of the stronger variations. I've been down this path with a number of folks from IRS national office and I can tell you that they take my position. There is nothing impractical in the reg. If a plan terminates, the deductible amount for that year can pop up to the extent necessary to make the plan adequately funded. I see nothing that extends that to future years. But, I can agree to disagree if you can!

You are welcome.

An apt question, indeed. I suppose it goes to the question of what the specific order says. If it says that "THE monies received must be turned over." (and those monies are identifiable, which is not an easy thing to establish), then I might argue 206 is violated by the order. However, if it says "An amount, equal to that which was received, must be turned over." then I would argue that such a remedy is perfectly acceptable. Note that acceptable does not mean or imply that fairness. Just that I find it more likely than not that a federal court would not step in on the basis of the state court stomping on ERISA. Of course, what *I* would argue is irrelevant because I'm not a lawyer. FWIW.

State courts have almost no limitations when it comes to fashioning their orders. Whether their orders are fair or not is something for the attorneys representing the individuals to decide. So, there is no "correct" answer to your question.

I think things have taken a detour. SoCal, I think your cite is irrelevant to the timing of the OP's issue. That is dealing with increasing the deduction with respect to the year of plan termination. That isn't at issue here. The year of the plan termination is the year ending 7/07 and the amount determined with respect to that year, with or without a 404(o) bump, is deductible in calendar 2007. Calendar year 2008 is what the OP is asking about. J4FKBC, 1. Yes, but it still applicable only to the year in question. It does not mean that you can make a contribution in a subsequent fiscal year and then deduct it. 2. Seems right. I don't see where your final conclusion comes from, but it is not what I intended to convey.