Takeover/change in actuary

[dmb]

My firm has taken over a DB plan which i understand is a change in funding method in itself. We were able to match within less than 10 percent the prior actuary's 2004 valuation numbers. Is a filing for approval necessary or an attachement to the 2005 Schedule B when prepared?? Thanks.

[Effen]

You need to read Rev. Proc. 2000-40. I believe it is only pre-approved if the change in normal cost and accrued liability is less than 5%.

I think a lot depends on the size of the plan, but 10% is pretty high. You may want to contact the prior actuary and discuss potential reasons for the difference.

[david rigby]

I also would be concerned with a variation of 10%. To be fair, you said "less than 10%", but did not elaborate. Assuming you have a copy of the plan document to follow, you probably have two primary things to review for closer matching: (1) data, and (2) assumptions. It would not surprise me if its both.

[dmb]

Thanks for the responses, I'm actually within 4.7% on the NC and 7% on the Accrued Liab. I will look closer at the assumptions and the Rev Proc. Thanks again.

[david rigby]

Probably obvious, but one way to help narrow this down, at least with respect to the AL, is match the inactive participants first.

BTW, if FAS87 is applicable, I suggest you spend some time trying to match these values as well.