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Well, it's fair to say I haven't used entry age normal for quite some time (since PPA became effective). However, I've been asked to assist with a governmental plan and have run into the following question. I'm looking through my old William Aitken funding methods book. However, in all the examples, it's showing service back to hire (including examples where hire/entry date precedes the plan inception date). I'm trying to figure out the EAN funding span for the following example: Age at hire: 25 Age at plan inception: 35 Participants can buyback 5 years of service: so back to age 30 for this example So, would the EAN funding span go from: a) age 25 (hire to retirement) b) age 30 (benefit service date to retirement) c) age 35 (plan inception to retirement)

My firm was recently contacted by Winklevoss. They advised us our license fee would be increasing by 50% effective 1/1/24. Has this happened to anyone else?

These plans are very straightforward, and I know the software this firm uses. It literally should take an actuarial analyst 10 minutes (15 max) to open the program, open the data, select copy all, paste in a spreadsheet, and email over. I would certainly understand a fee if it was a complicated plan and there was a lot of work to be done, but that's not the case here. Also, part of administering DB plans on a yearly basis is to clean up the data. If extra work was needed while this plan was at the other firm, then they would have charged accordingly at that time. Appreciate everyone's great feedback!

Recently won a client with 3 small DB plans (80, 20, and 5 participants). The prior actuary is refusing to release the data unless the client pays exit fees of $500 per plan (they are paid up otherwise). Questions: 1) Are exit fees common? In over 15 years, I have not seen them (especially in the small market). $500 for a 5 person plan seems rather excessive. 2) In my view they are essentially holding the data for ransom. Based on IRS Circular 230 and actuarial code of conduct, I don't believe this is allowed. Plus, this fee was not previously disclosed to the client. 3) Coincidentally, a couple of years ago this firm took a client from us (with 3 DB plans). We transferred the data and answered follow-up questions (no fees charged). I asked for the same professional courtesy, and they are flat out refusing. Options?

If I may I would like to ask a follow-up question about floor offset plans. Specifically, it sounds like you can get only the company's principals in the DB plan, and just provide the minimum gateway in the DC plan for everyone else via a uniform allocation. Am I missing something here? If it's that easy, then why don't we see these for all new small market DB plans?

If you use age to define allocation groups, then you could have age discrimination issues. If you instead just put everyone in their own rate group and bump up the benefits for the younger people (not defining their benefits based on age, but instead defining them based on Jane Smith being in Group E), then you should be fine. The IRS allows you to discriminate based on age for testing purposes. They just don't want you discriminating in favor of HCE's.

In my experience the client would need to be covered by the PBGC, but it's a gray area.

In the past we have used Inspira out of Pittsburgh, PA.

Note, when terminating a DB plan, you cannot move the monies for missing participants into an IRA. The PBGC will not accept this due to the IRA's fees. They will need to go through the PBGC's missing participant program.

Checked SOA directory. Looks like he's an EA (1976), MAAA, and MSPA.

Single employer plan without PPA exemptions (i.e. airlines) and not multiemployer. Also, looked up on DOL the 40 other plans the actuary works on, looked up half dozen of the bigger plans, and they all have the same issues. Most of the other plans are 1 or 2 person plans, so they usually fly under the radar. As for automatic 5500 checks, prior actuary just checked the 'yield curve' box and put whatever effective rate they wanted. I believe the IRS would only pick up on this if the plan were to be audited. Also, I believe the confidential aspect of ABCD has to do with who reported the offense. My friend is more concerned of causing issues for the client rather than the prior actuary. Usually he would prefer not to ever report another actuary, but these issues are egregious.

Has anyone reported an actuary to the Actuarial Board for Counseling and Discipline (ABCD)? A friend who is an actuary told me of a DB plan they recently took over where the prior actuary seemed to be ignoring PPA. Sure, they were using the new Schedule SB rather than just the old Schedule B, but they clearly were using any interest rate they wanted, standard calculations were wrong (i.e. shortfall amortization calculations), and they were ignoring new rules such as the annual funding notices and benefit restrictions. When reading The Application of Precept 13 of the Code of Professional Conduct that the American Academy of Actuaries released last December, it appears that this actuary needs to be reported. My friend is concerned that by doing so, the IRS will audit all of the prior actuary's plans. This could create a problem for his new client. Even though the plan has been cleaned up and is now functioning according to the law, an IRS audit usually creates a headache. So my questions are: 1) has anyone reported another actuary to the ABCD? 2) and if so did it create any problems for your clients? Thanks.

My main question is why are they terminating on the first day of the year, when they could have just done it one day prior (the last day of the prior plan year)?

MAP-21 was the law. You only needed an election form to opt out of it for the 2012 plan year.

The IRS only cares when the assets are at $0, so I vote for 11/30.