PBGC takeover

[AndyH]

Anyone willing to describe the process from the perspective of the plan's actuary of a takeover of a 150 life DB plan who's sponsor went belly up and closed it's doors and boxed and stored what records it had, leaving the actuary/TPA as the only source of any reasonable records of benefit entitlements?

What is the actuary's responsibility? Can it get paid for it's time assisting the PBGC in compiling records?

[david rigby]

What is the actuary's responsibility? Can it get paid for it's time assisting the PBGC in compiling records?

Your responsibility is to act professionally.

Paid? Yes. Tell the PBGC what you think is reasonable, and be prepared to negotiate. If there are unpaid invoices, deal with those separately.

Just an opinon.

[AndyH]

Thanks. What do you mean by "deal with those separately"? Yes, that is another issue.

[Andy the Actuary]

I do not recall reading in the golden book of professional ethics that you must work for free or cut your customary rates. In fact, it would make perfrect sense to request and operate on a retainer basis (paid out of the plan assets?). If the PBGC finds your terms unacceptable, they are free to retain another actuary. This position makes sense in particular since you implied by "takeover" that you have not had any involvement with this client and plan.

It became very clear to me in my early days of entrepreneurship that if I were willing to work for free I could get a lot of business.

[david rigby]

Thanks. What do you mean by "deal with those separately"? Yes, that is another issue.

Unpaid invoices should be identified first (not necessarily paid first). Then discuss ongoing services. Sure, they might be combined in a more inclusive engagement, but at least you will have addressed them.

[Andy the Actuary]

I'm confused on the facts. I thought you (AndyH) were going to take over this plan from another TPA/actuary. Is this correct? If so, there shouldn't be any unpaid invoices. Would you please jot a few lines about the particular circumstances.

aTa

[AndyH]

Existing client with underfunded plan goes bankrupt. Multiple Form 10s filed. PBGC inquires several times, but has bigger fish to fry.

Bankruptcy attorney's ERISA attorney tells us he expects the PBGC to take over the plan soon.

Remnants of current "client" does not even have a list of participants, nor does bankruptcy attorney. I am anticipating a lot of work that will be required of us, some "actuarial" perhaps and much "administrative". Plus some existing bills are unpaid (secondary question).

[AndyH]

Thanks. What do you mean by "deal with those separately"? Yes, that is another issue.

Unpaid invoices should be identified first (not necessarily paid first). Then discuss ongoing services. Sure, they might be combined in a more inclusive engagement, but at least you will have addressed them.

But why would the PBGC care about unpaid bills of defunct plan sponsor? If I were them I'd say "not our problem".

[david rigby]

But why would the PBGC care about unpaid bills of defunct plan sponsor? If I were them I'd say "not our problem".

Correct. I meant your unpaid bills, if any.

[Andy the Actuary]

Well, now as Mr. R suggested, you're into negotiations. You're the PBGC's best shot at getting this plan disposed of. Again, it is not incumbent upon you to work for free.

[AndyH]

Thanks for the comments.