JARichardson

We posed the question to an ERISA attorney and the response was that if you provide the lifetime income ilustrations with the June 30 quarterly disclosures, they must be distributed by the due date of those disclosures, August 15, 2022 AND they must be based on the June 30, 2022 ending account balances. Specifically: The DOL regulation is 2520.105-3(b), which describes the content of the notice. Item 2 requires that the notice include: "The value of the account balance as of the last day of the statement period . . ." Items 3 and 4 require that the amount in item 2 be expressed as a single life and a joint and survivor annuity. In other words, the illustration is to be made with reference to the account balance on the last day of the statement period, which is the last day of the quarter. I've heard that the DOL was going to issue some transitional guidiance by the end of March but that didn't happen. I just don't see how we can get these all done in this time frame even if all the 2021 work was done and we could start working on 2022 now.

Thank you all!

All excellent questions. The divorce has been going on for 8 years. We have not had the plan that long so our records only go back so far. I don't think they are questioning our integrity but certainly that of the owner(s) of the company. We have already charged them for several hours of research just on what we do have. The client is hoping to put an end to it by telling them they can't have all this information.

The attorney is actually wanting to see the entire plan's balances and allocations going back to the inception of the plan. The participant's father originally owned the company and retired and they are questioning what he received.

We have given them that information. Now the attorney is asking for the "complete valuation" so he can review the allocations. The ex-spouse feels that his retirement account should be higher than it is.

The alternate payee's attorney is questioning the valuations and wants a full accounting. It's is a pooled profit sharing plan. The client is asking if there is anything in the code that prevents the disclosure of this information as it relates to other plan participants. I believe there is but I can't find it. Any suggestions on how to handle this situation?

Thank you for your comments!

We took over a cash balance plan that is a c-corp but they have a large group of doctor/owners. Historically the doctors review their plan annually and request an amendment to adjust of the doctor's contribution credits. Our actuary is concerned that this series or pattern of amendments changing the benefit structure violates the definitely determinable benefit rule. He feels the plan should only be amended every 3-4 years. The other concern is that these desired allocations could be construed as a CODA and will exceed the 402g limit. Since the previous actuary allowed it and we have some other plans that amend to adjust their contribution credits (albeit not as frequently) I'd like to get more opinions on it. Thanks!

The fee disclosure that was provided to participants didn't include all the TPA fees being deducted from participant accounts. I can't find anything that addresses what the correction procedure is. Can anyone offer direction?

Makes sense to me! Thank you.

We have a client who was a sole prop that told us late last year they were forming a C corp and the plan needed to be amended effective 1/1/2020 to make the C corp the plan sponsor. The plan was amended and the amendment was signed. Now the CPA is asking if the fact that they are still paying payroll, etc. through the sole prop is a problem. We didn't make the sole prop a participating ER because we were told it was going away effective 1/1/2020 and now they are stating it will be 1/1/2021. I can't find anything that supports revoking the amendment. Is VCP the only option for correcting this?

We have a one person DB plan sponsor: FY is calendar. PYE is 9/30/18. He contributed for the 2017 plan year in Feb 2018 and filed his 2017 tax return without extension. Then he made the 2018 deposit in September 2018 before the 2017/2018 PYE. Since he deposited the money during the plan year it will be listed on the 2017 SB but he'll deduct it in 2018. The 2017 PY max deduction doesn't cover the entire amount, but we have room in and time to amend the formula back to 10/1/2017 so it is deductible. We are concerned with the deposits during being split between the 2 tax years. I think that it is ok but would like another opinion.

They sure are! Thanks.

NOIT went out in December 2017 for a 1/31/18 plan term date. Plan anniversary was March 1. Plan has been frozen since 2006. When the new rates went into effect March 1 the plan was more underfunded than the client anticipated. They took a couple months to figure out if they were going to go ahead with the plan term. Now they want to move forward and we're past the 180 days to file the PBGC 500. They really want to get it paid out by year end but especially by PYE. Its not clear to me what the options are. I see where you can change the proposed term date - but not more than 90 days. So have we missed that window too? Has anyone been in this situation? Is there anything we can do at this point other than start over?

I have a traditional DB plan that is terminating. Lump sum was only available at retirement age and now it is available to all for the plan term. When we calculate the PVAB for anyone at ERD we base it on the benefit payable on ERD. We are calculating the PVABs for the 6088 and have discovered that due to the current segment rates the PVAB of the NRD benefit is higher than the than the PVAB of the benefit at ERD. Has anyone run into this? The document really doesn't address it. It makes a $130K difference in the termination distribution amounts. How will the PBGC expect us to calculate it?