2009 AFTAP Certification

[Andy the Actuary]

Public Service Announcement

A number of clients have asked what in the name of J. Fred Muggs they are going to do about the 80% threshold in 2009. This is particularly a concern to those who dumped in a considerable sum in 2008 so that their plan could continue to pay full lump sum benefits (except to the HCEs).

In 2008 it would have been a stigma, perhaps even a sign of poor asset management, to all of a sudden announce that lump sums were restricted. So, many employers ponied up. Now, bless this stinking market. Only those people who went to cash early or who are lying made money during this slump. Most (yours truly included) got decimated. The market now provides a natural and reasonable rationale for letting the chips fall where they may. While participants will not welcome with smilies the benefits restriction notice, they will understand the reasoning and may not be so apt to burn the employer in effigy.

If the market continues to decline throughout the remainder of 2008, don't be surprised if Congress comes back with some temporary 436 relief (perhaps removing for 2009 the deemed 10% reduction of the 2008 AFTAP presumption). Of course, don't be surprise if they don't.

[Andy the Actuary]

In the 1950's, pop singer Eddie Fisher had a huge hit with "Count Your Blessings." It went like this, "When I'm worried and I can't sleep, I count my blessings instead of sheep, and I fall asleep, counting my blessings." In actuality, when Eddie was worried, he did hard drugs, and bleeped out. It worked for him -- he's still alive.