Ancestral PIA Determination

[Guest windwalker]

I need to determine my PIA or as the plan calls it PSSB (Primary Social Security Benefit). This integrated defined pension fund defines PSSB in this case as "your age 65 Social Security Benefit projected as of 12/31/1988".

Social Security has not been able to help. I would appreciate any ideas you might have.

[david rigby]

Perhaps this could help.

http://www.ssa.gov/planners/calculators.htm

[Guest windwalker]

Thank you for your reply. I have tried these previously, but did't get where I needed to be.

I need to establish my PIA or PSSB frozen in time as of 12/31/1988. That is , my benefit projected at age 65 based on my earning up until that time. But not inflation adjusted in 1989, 1990 etc. since at that time those numbers were as yet unknown. In other words, if I walked into SSA’s office on 12/31/1988 and asked, “ If I stopped working today, based on my past earnings, what would my PIA be when I became 65?

[AndyH]

Most actuarial firms have programs that can easily do this. You should hire somebody to do the calculation for you and give you a printout of the details.

One thing you might need, however, is a copy of the plan document which presumably says what to do about wages in the years that you did not work for your 1988 employer, and about what assumption to make about post-1988 wages.

[MGB]

I will be unavailable for the next couple of weeks, but if you still need this after that time, I have a spreadsheet that will do this and can send you the results easily.

Note, too, the other comments. The plan may say to use frozen earnings projected forward or use zero earnings projected forward. Both approaches are very common. Also, the plan may provide that an assumption of past earnings is used in the calculation rather than actual earnings (which you would need to provide). Often, when an assumption is used, they also have a provision that allows the person to provide actual earnings if they want to.

The plan administrator will do this calculation for you. I presume you want to do it just to be able to verify their calculations. You are under no obligation to furnish your own calculation of this to them.

[Guest windwalker]

Thanks for your response. No, you are correct, I am very cautious about the plan administrator. Unfortunately, the plan document is horribly silent on how to determine this PIA. It just says my Primary Social Security Benefit (PSSB) is my age 65 Social Security Benefit projected as of 12/31/1988. This was the date when an earlier plan was terminated and rolled into a new one.

I will not give up this fight so when you have the opportunity to email me the program please do so.

Thanks again for your help, this is just one of things in life that is just not right.

vmalone@infi.net

[david rigby]

Perhaps you could try to obtain:

- a copy of the calculation of the offset actually used.

- a copy of the administrative interpretation from the plan's "retirement committee" that is used to fill in the "gaps" of the definition of PSSB. If the plan definition does not define future compensation (alternatives described by MGB), then it would be impossible to calculate the PSSB without some additional information.

[Guest windwalker]

Thanks again for your response.

I am afraid your last assumption may well be the answer. I have requested the calculation of the PSSB and am awaiting the response. The company has been so evasive about what should be a relatively simple process that I am very suspicious.

The present company which controls the pension told me early in the game their consultant could not find tables to match the PSSB used by my former employer, so they substituted a number which pulled down my monthly benefit significantly.

Their response is; this is the number we intend to use unless you can get SSA to give you something different. The folks at SSA have tried to help. I had a 1984 statement which showed the PSSB at that time. SSA used a PIA convert/deconvert program which used my reported wages through 12/31/1988 to arrive at a number within a few dollars of the PSSB used in the original pension determination. This company refuses to accept this saying they will not recognize the 1984 number as a starting point.

[david rigby]

Ah a clue!

It may be that earlier calculations used the "zero future earnings" technique, and later calculations are using the level future earnings technique (both probably without adequate docuemntation). Now you have an inconsistency that the plan sponsor should address.

(I am not stating that one is "more correct" than the other, only that the process should be documented and consistently applied.)

[Guest windwalker]

Yes, I had a similar thought, even to the point of saying it appears inconsistent that you would be willing to accept a PIA number uniquely tailored to me or rather my earnings history. In looking at hundreds of employees, I can't believe a standard determination does not exist.

[AndyH]

I think that your suspicions are warranted and would not be surprised if you eventually find that the calculation was just plan wrong.

I'd focus on getting the document that existed in 1988. Such a request should be in writing.

[Guest windwalker]

I am awaiting a response to determine where the higher PIA from the company's consultant was obtained. But your idea is a good one.

The present company's position, however, is that the prior determinations made by the former company (Medusa Corporation) are inaccurate. That's what makes this thing so infuriating. When I terminated my employment with Medusa, they provided me with a separation letter confirming my rights and responsibilities. My pension benefit at age 65 and 55 was stated to the penny. Medusa was acquired by Southdown and they also confirmed my pension to the penny. Now, these people who acquired Southdown and the Medusa pension fund are disallowing both of these prior determinations as errors.

[Guest Harry O]

. . . and if the original calculations were wrong, they are wrong. You are only entitled to what the plan document promises. Unfortunately, you generally cannot rely on an incorrect benefit statement. That is why you need to get the relevant plan document and see what it says. That document controls your fate, not the original or re-confirmed benefit statements (which typically have language to the effect that they are estimates, blah, blah, blah).

[Guest windwalker]

Thanks for your reply. I do have a booklet that was provided to me as an employe. It does detail the formula. Unfortunately the definition of PSSB is "the age 65 Social Security Benefit projected as of December 31, 1988". The reason for that date was the termination of one plan and the initiation of another. It doesn't appear anywhere to tell how to determine that PSSB or PIA years later. That number, is the whole issue.

Fortunately, I stumbled on to this site which has provided more insight than I've achieved calling agency after agency for months.

All I am asking for is what I am entitled to receive. The explanations from the company as to why I should accept less have been vague and virtually hostile. My retirement was to be effective August 1, 2002. This was not a last minute decision. I applied for this retirement on April 9th and never received a word from them until June 28th despite numerous calls to the company. This is not how this process is supposed to work.

Thanks again, I appreciate the feedback.

[david rigby]

Perhaps not what you want to hear, but your phrase

"the age 65 Social Security Benefit projected as of December 31, 1988"

is consistent with the "level future earnings" as mentioned earlier. But you should continue to request additional documentation.

[Guest windwalker]

The summary from Medusa cites a 12/31/88 PSSB of $838.60. Present company is using $975. The responses on this board, (again thank you all) make it appear that an indefinite plan definition of how to handle future earnings has perhaps permitted different assumptions. If this issue is not addressed in the plan, or administrative interpretation from the plan retirement committee; then what?

Surely, they would have tested these different models for future earnings to look for a match to the Medusa PSSB. I would think my numbers or other prior determinations would lead to identifying the assumptions used in the past. If that is the case, can the current plan sponsors change this assumption without openly modifying the plan?

[david rigby]

Although not a "hard rule", my experience is that the lack of clarity in plan provisions should be addressed by either amending the plan or by administrative interpretation. The latter happens often, but its documentation happens less often. In either case, consistency is important. That is why plan documents must be in writing.

To be fair, it is possible that the original sponsor had one consistent but undocumented interpretation. Later administrative authority may have had to make a best guess as to what that was, and may have done so without benefit of prior information.

Your continued insistence on their consistency is a good idea. But allow for the fact that they may not have any good information. It would not hurt to suggest other names that they could research, although records may not be available.