DB plan age error

[Guest lip]

WE just took over a db plan and were told prior actuary "erred" by 17 years on a principal(retired) age

(the age was increased incorrectly by 17 years deflating the PVB dramatically.

It probably would have caused deficiencies in some years;and PBGC premiums are off also.

Should we go VCRP or just correct going fwd.

Plan will be terminating either as distress term or by owners waivibg benefits

ty

[david rigby]

Is this a data correction? If so, the only thing to do going forward is to use the correct data.

I'm not going to ask if the DOB "error" was intentional.

[ak2ary]

You are aware that the prior valuations are wrong. As a result your opening credit balance/funding deficiency is wrong. I don't believe you can just go forward from that point, if you are the actuary. VCP cannot be used for this, unless the benefit payments have been wrong (in which case they can be corrected in VCP)

If this is a small plan and the principal's benefit is significant to the valuation results, I believe that you would be required to redo the past valuations and file amended schedules B. Others would argue that you could simply do an attachment to this year's B showing why you changed the opening crtedit balance on this year's B versus the closing balance on last year's B. The fact is though, that 5330's are due to pay excise tax on funding deficiencies and you as actuary didn't do anything wrong and shouldn't assist in hiding mistakes made by other practitioners. If you can't get the excise taxes waived, the client should get them out of the hide of the prior actuary.