conveying db participant costs

[Guest lip]

In ind agg plans(we know we're somewhat past that now for 2008)we would give client nc as the cost per person;but often this was not great approx of what person is due.

We also at times found giving pvab differential from previous yr to current one not perfect solution either.

Any ideas?

ty

[david rigby]

Increase in PVAB does not reflect asset performance, so it will not be a true reflection of "cost". The IA-NC may (or may not) be a good solution, especially depending on how the IA method reflects gains/losses. But you also have to be careful how you reflect other items; for example, plan changes or the liability for existing inactive participants, etc.

And be careful of the assumptions used to develop the IA amounts. (BTW, this applies whether or not IA is the funding method.)

Have I left anything out?

[Andy the Actuary]

Increase in PVAB does not reflect asset performance, so it will not be a true reflection of "cost". The IA-NC may (or may not) be a good solution, especially depending on how the IA method reflects gains/losses. But you also have to be careful how you reflect other items; for example, plan changes or the liability for existing inactive participants, etc.

And be careful of the assumptions used to develop the IA amounts. (BTW, this applies whether or not IA is the funding method.)

Have I left anything out?

For self-employed individuals with employees, previously communicated staff employee IA costs for inclusion on 1040 Schedule C. Amounts employer contributed in excess were reported on 1040. Would continue to do same with recommendation employer contribute on old IA basis so long as exceeded 430. Then, would have to make some adjustment that I haven't yet thought of.