412(e) software

[Guest CWM]

We're looking for a software package to illustrate and administer 412(e) defined benefit plans. Anyone have a recommendation?

[frizzyguy]

Don't work with 412(e) plans. Oh you meant for software...no suggestions.

[ETA Consulting LLC]

Don't work with 412(e) plans. Oh you meant for software...no suggestions.

There wouldn't be any software to illustrate 412(e) as the software would have to be built from scratch using the guarantees within the annuity and insurance contracts to create the values. So, if you have an insurance carrier with fixed annuity and insurance contracts (presumably of the same series), then you'd have a programmer build a system utilizing the actuarial assumptions (and rates) for those particular contracts.

The administration, on the other hand is different; that can be done on any system once the plan is in place.

Good Luck!

[SoCalActuary]

We're looking for a software package to illustrate and administer 412(e) defined benefit plans. Anyone have a recommendation?

Ask the carrier first. Some major insurers have made their rate files available to pension software vendors for illustrations.

Since this is also an underwriting duty of the carriers when creating new policies, the pension software is not the final determination.

Sometimes you get differences in procedures based on risk class where life coverage is involved, or timing issues about effective dates and periods that a rate file will be active.

Once the policies are created, annual administration will need to track the expected retirement benefit, dividend treatment, over- & under-payment of premiums, policy loan problems for premiums not paid timely, conversions to reduced paid-up status, and other changes.

In addition, the software may need exceptions in computing the increases in policies or the ability to underwrite automatic increases in benefit amount within an existing policy.

Also, contact the major software vendors to see if they have an existing relationship with the carrier.

[Doghouse]

A little bird told me that the Relius system can be used for this purpose. You might check with their actuary as to the details.