ishi

Yes, but interestingly, our change is almost a 100% increase.

Very interesting summary - thank you! My experience is by-and-large limited to the plans at my firm.

That is exactly my point. There are numerous articles out there indicating you can switch to the full yield curve without getting IRS approval, but the vast majority of the plans I've seen have already elected to use segment rates with a lookback, and DO NOT get the "free" change to the full yield curve without approval. Thank you for your quick reply!

There has been a lot of talk recently about some plans switching to use the full yield curve for funding purposes to save PBGC premiums, and enjoying an automatic IRS approval to do so. Is this really automatically approved for all plans/circumstances? §1.430(h)(2)-1(b) indicates to use segment rates for the month containing the valuation date. Alternately, under §1.430(h)(2)-1(e)(1) & (2) you can elect to use segment rates with up to a 4 month lookback. Most plan I've seen use segment rates with a lookback. §1.430(h)(2)-1(e)(1) further indicates "Any election in this paragraph (e) may be adopted for a plan year without obtaining the consent of the Commissioner, but, once adopted, that election will apply for that plan year and all future plan years and may be changed only with the consent of the Commissioner." So, it appears a plan that elected to use segment rates with a lookback does not get automatic approval to switch to the full yield curve under §1.430(h)(2)-1(e)(4). What am I missing here? Initially, I was always under the impression that you can have automatic approval to switch the full yield curve, but the analysis above seems to contradict that. Thanks in advance!

Wondering if there was any resolution to this situation. I have a similar situation involving an active participant receiving RMD payments from a DB plan. Participant started receiving RMD payments 4/1/2020 at the 415 comp limit, has accrued more benefits during 2020, and subsequently terminated 12/31/2020. The plan's formula accrued benefit exceeds the 415 comp limit at 12/31/2020, and the lump sum payable 1/1/2021 exceeds the 415 lump sum limit. Do these amounts need to be reduced to reflect the payments received during 2020? Is this truly a MASD situation?

I always thought 2.

Bumping this, as more people probably have looked at this since January.

I finally read the entire Notice, and I now believe remuneration for 2018 is the present value (as of 12/31/2018) of the 2018 accrual - plus - earnings (in this case interest) on the 1/1/2018 present value. As such, this approach now matches how I think the 990 Schedule J calculation should be done, and differs from the calculation for FICA purposes (which is only the present value of the 2018 accrual). Does anyone agree with this approach, or have additional thoughts?

Thanks. I was trying to leverage present values we already calculate and thought the present values determined for FICA purposes were better than those determined for 990 Schedule J purposes.

In thinking about a standard non-qualified SERP plan for a tax-exempt organization (a nonaccount balance plan), would the remuneration under Notice 2019-09 be the same as for FICA purposes? In general, it seems they would be the same. Thanks in advance!

The PBGC has a missing participant's program: https://www.pbgc.gov/prac/missing-participants-program

I read yesterday's announcement from the American Academy of Actuaries regarding the results of the voting on proposed bylaw changes, and it appears that the current leadership of the Academy is decisively petty. "The real art of conversation is not only to say the right thing at the right place, but to leave unsaid the wrong thing at the most tempting moment." - Dorothy Neville-Rolfe

I have a side question. Assume there are 2 different firms helping the client - the actuary responsible for the SB only and another firm responsible for the rest of the 5500. Which firm do you think has the ultimate responsibility to inform the client of their company intranet posting requirement? Said another way, if your client got in trouble by the DOL for not posting the information, which firm could be culpable?

I am looking at this currently as well. In my case, the plan document indicates that late retirement benefits begin the first of the month following DOT (if after NRD). The plan added RASD language later to "fix" the QJSA notice requirement. As far as I can tell, the document does not allow for a future ASD. As you imply, the regs are not as clear as we would like.

OK - I'm retracting my pronouncement from post #6. As John points out, the 401(a)(4) section does refer to compensation for testing purposes, and need not apply to compensation used for accrual purposes. Having spent more time researching, I am comfortable with freezing the average salary, but allowing benefit service to continue. The plan will need to be tested every year, comparing the actual accruals (using frozen salary) to the then current compensation, and hope for then best from a demographics perspective. Thanks again.