Plan Termination, PPA and PBGC

[rcline46]

Somehow I got myself totally confused, so what else is new?

Terminating DB plan covered by PBGC. Act Equiv is set to GUST, fully amended to PPA/EGTRRA.

IRS says to use its rates for PVAB and lump sum distributions.

PBGC says use its rates for lump sum distributions.

Which rates do I use for distributions from on-going plans?

Which rates do I use for distributions from terminating plans?

Why can't they get their acts together and use one set of rates for PBGC premiums, funding and distributions? Never mind answering this one, "Its the government, stupid!".

[Andy the Actuary]

The Plan document governs how to determine lump sums whether or not the Plan has terminated.

[SoCalActuary]

If you are terminating an underfunded plan that will be taken over by PBGC, then you have a problem.

If not, just follow the plan documents and pay out on the IRS 417(e) rules.

If the PBGC is going to trustee the plan, then they will have jurisdiction. If you disagree, you may go through their appeals process.

[rcline46]

Thanks all. I THOUGHT the 417(e) rules ruled, but reading the PBGC notices, they SEEM to read you must use their rates to pay on standard terminations.

I think all regulations, announcements, and so forth should be writter at a 12th grade level, and clearly. Oh well.

[david rigby]

Some chronology might help: 417(e) was subtantially amended by TRA86.