PBGC Schedule MP

[Penman2006]

I have been working on defined benefit plans since the early 1980's but up until now I have never had the pleasure of preparing a Schedule MP and the related MP schedules for submitting a missing participant's money to the PBGC. The participant in question has a lump sum greater than $5,000 and therefore cannot be forced into taking a lump sum. Unless I am totally misunderstanding the procedure this appears to be far more involved than I expected. According to what I have gleaned from the instructions and regs, his plan lump sum has to be compared with a lump sum using the PBGC interest and mortality basis stated in the regs. Unfortunately the PBGC mortality is not simply just some standard table. It starts out with a standard table but the regs require that each years mortality factor gets projected based on their projection table. The projection is for the number of years from 1994 to the year containing the distribution date plus 10 years. Therefore the mortality table is going to have to be projected for each individual since it changes for each individual based on the year of distribution.

If anyone that has been through this process can tell me if I'm on the right track I would appreciate it.

[Guest Grant]

I have been working on defined benefit plans since the early 1980's but up until now I have never had the pleasure of preparing a Schedule MP and the related MP schedules for submitting a missing participant's money to the PBGC. The participant in question has a lump sum greater than $5,000 and therefore cannot be forced into taking a lump sum. Unless I am totally misunderstanding the procedure this appears to be far more involved than I expected. According to what I have gleaned from the instructions and regs, his plan lump sum has to be compared with a lump sum using the PBGC interest and mortality basis stated in the regs. Unfortunately the PBGC mortality is not simply just some standard table. It starts out with a standard table but the regs require that each years mortality factor gets projected based on their projection table. The projection is for the number of years from 1994 to the year containing the distribution date plus 10 years. Therefore the mortality table is going to have to be projected for each individual since it changes for each individual based on the year of distribution.

If anyone that has been through this process can tell me if I'm on the right track I would appreciate it.

I haven't actually submitted one yet, but I was reading up on it, and it certainly looks like you are on the right track. We imported the q's from the PBGC website to create the factors.

[Penman2006]

Thanks Grant.

It really looks like a lot of work but I guess why would they make it easy since it's a pain to deal with.