PPA 06 Delay ?

[JAY21]

So I'm scrambling to get up speed on various aspects of PPA 06 but don't get the sense that with only 2 months until "liftoff" there is much "angst" out there at least on these discussion boards. That leads me to believe that either (a) I'm the only idiot that doesn't have thie stuff down yet, or (b) people have inside knowledge that leads them to believe this will get post-poned a year.

I'm comfortable with being the idot that doesn't get it fast, but if there is a collective unspoken feeling that this is getting post-poned another year I'd appreciate anyone sharing those thoughts, guesses, or insider tips (I promise I won't use the insider knowledge for unlawful gain in timing Benefitslink's stock price fluctuations).

[david rigby]

(a) No comment.

(b) IMHO, there is a near-zero chance that legislation will pass to postpone the effective date(s).

[Andy the Actuary]

You're not alone. I'm personally and professionally disturbed and angered that I sound like an uninformed idiot in advising my clients. Sooner or later the clients need numbers and not theory.

We're supposed to have systems in place in 2008. I don't know what systems to build*. It's further distressing when you see literature (from major consulting firms) that purports to serve up the gospel, but in reality they have no answers. Unfortunately, the administrative bodies' delay (they've had close to a year and one-half and they're still worrying about mortality tables) does not extend the PPA effective date. I believe the House has entered and the Senate is about to enter hybernation until January so don't expect immediate relief. I pray someone will read this comment and point out the light I've overlooked.

*I hope everyone realizes that at this juncture, we simply believe we understand how the layered interest rates will operate, and in particular, in respect of plans that pay lump sums. To my knowledge, this is all educated guesswork. I may have missed some communication, but I've seen nothing from the IRS that details the calculations.

[Guest SVP]

I share the concern about not having clear guidence on PPA and also share the surprise about what seems to be a relative calm amongst what one would think is a representative group of practitioners. Isn't anyone getting ready to hit the panic button?

Lump sums have to paid starting 1/1/08 and aren't we really filling in the blanks with respect to some fine points like look back and stability and are still waiting for guidence on mortality? And then there are the questions about most valuable QJSA if you don't use prescribe 417(e) interest and mortality for lump sums and plan amendments and 204(h) notices and so many other matters related to plan administration....

I am very nervous that we are guessing at what to do and when the regs finally do come out what if we have not guessed correctly? If people have been underpaid that can be corrected but it could be a huge task for some large plans! What if people made choices about their benefit based on that information and it wasn't accurate or timely? At this point participants should be considering their options and making elections with 1/1/08 BCD's. What are they being told? If people get overpaid then that's a big problem - recovering overpayments is a nightmare!

imho - An extension would sure help!

[D Syrett]

I share the concern about not having clear guidence on PPA and also share the surprise about what seems to be a relative calm amongst what one would think is a representative group of practitioners. Isn't anyone getting ready to hit the panic button?

Lump sums have to paid starting 1/1/08 and aren't we really filling in the blanks with respect to some fine points like look back and stability and are still waiting for guidence on mortality? And then there are the questions about most valuable QJSA if you don't use prescribe 417(e) interest and mortality for lump sums and plan amendments and 204(h) notices and so many other matters related to plan administration....

I am very nervous that we are guessing at what to do and when the regs finally do come out what if we have not guessed correctly? If people have been underpaid that can be corrected but it could be a huge task for some large plans! What if people made choices about their benefit based on that information and it wasn't accurate or timely? At this point participants should be considering their options and making elections with 1/1/08 BCD's. What are they being told? If people get overpaid then that's a big problem - recovering overpayments is a nightmare!

imho - An extension would sure help!