Looking for Sample Interim Distribution Policy for Pooled DC Plan

Hello, 

I am looking for sample policy language that would guide trustees in conducting interim valuations for a pooled plan that has been annually valued in the past.  This topic was discussed in 2012 (see below), but I was curious if anyone has come up with a policy since that time. 

Some posters in the 2012 forum discussion advocated for not adopting a policy and instead leaving interim valuations up to the discretion of the trustees via broad interim valuation plan language.  The thought being that the policy would potentially force the trustees to take action when it practically does not make sense.  

If no one has policy language, has anyone seen any triggers of interim valuations that were helpful, or mechanisms that would help mitigate loss in the case of large distributions taken after a substantial market drop?  

I am not so concerned with nondiscrimination issues at this point in the analysis. 

Thanks!

21 hours ago, OR-ERISA said:

Hello, 

I am looking for sample policy language that would guide trustees in conducting interim valuations for a pooled plan that has been annually valued in the past.  This topic was discussed in 2012 (see below), but I was curious if anyone has come up with a policy since that time. 

Some posters in the 2012 forum discussion advocated for not adopting a policy and instead leaving interim valuations up to the discretion of the trustees via broad interim valuation plan language.  The thought being that the policy would potentially force the trustees to take action when it practically does not make sense.  

If no one has policy language, has anyone seen any triggers of interim valuations that were helpful, or mechanisms that would help mitigate loss in the case of large distributions taken after a substantial market drop?  

I am not so concerned with nondiscrimination issues at this point in the analysis. 

Thanks!

 

 

If I was part of that prior conversation, my position has not changed. No written policy, as that only limits what should be done and cannot possibly contemplate every situation.  It is a fiduciary decision and should be made (each and every time) in a fiduciary capacity.  Basically, if there is a LARGE distribution, OR there has been a substantial change in the value of the underlying assets since the last val, then an interim val should be CONSIDERED (not necessarily mandated).  Of course, the words large and substantial are variables and not specifically defined, so each situation must be considered individually.  For example, if the assets are down, say 2% and the last val is $12,000, then it is unlikely an interim val would be done.  If the distribution is $250,000, an interim val would certainly be considered and most likely done.  FWIW.

On 8/1/2020 at 11:07 AM, Larry Starr said:

If I was part of that prior conversation, my position has not changed. No written policy, as that only limits what should be done and cannot possibly contemplate every situation.  It is a fiduciary decision and should be made (each and every time) in a fiduciary capacity.  Basically, if there is a LARGE distribution, OR there has been a substantial change in the value of the underlying assets since the last val, then an interim val should be CONSIDERED (not necessarily mandated).  Of course, the words large and substantial are variables and not specifically defined, so each situation must be considered individually.  For example, if the assets are down, say 2% and the last val is $12,000, then it is unlikely an interim val would be done.  If the distribution is $250,000, an interim val would certainly be considered and most likely done.  FWIW.

Yes, I agree with your approach, Larry.  Thanks!