BenefitsLink® Message Boards Digest

November 9, 2023

Here are the most recently added topics on the BenefitsLink® Message Boards

NonObserver created a topic in Defined Benefit Plans, Including Cash Balance

Can't Project 415 Limits for Funding?

"In ASOP 27 under '3.9.2 COST-OF-LIVING ADJUSTMENTS' it states that an actuary, for qualified pension plan funding valuations, 'may be precluded by applicable laws or regulations from anticipating future plan amendments or future cost-of-living adjustments in IRC limits.'

This is consistent with what I have always seen done for valuations I work on, which include two plans that provide automatic COLA increases to benefits and have plenty of participants with benefits limited by section 415. When calculating the Funding Target we project the COLA increases in the expected benefit streams for current retirees, actives, and TVs, but constrained to the current plan year limits.

I am just curious what 'laws or regulations' the ASOP is referring to that prevents us from projecting the limits for funding purposses?

In the Gray Book's response to question 1995-11, which asked if future changes in Section 415 limits and compensation limits due to indexing should be treated as plan amendments. The IRS response was 'The current position is that all changes in actuarial liabilities due to the section 401(a)(17) and 415 limits are to be treated as plan amendments, even the increases that automatically occur under a plan's terms.'

Is this somehow maybe tied to the answer? I primarily work on single employer plans, which are required to use an accrued benefit cost method. So I thought maybe this tied to the definition of an accrued benefit. But I think ASOP 27 covers multi plans too right? And they are not restricted to a specific cost method? So is there perhaps a definition or discussion somewhere around the provisions for calculating liabilities for funding purposes under the applicable parts of the code (430/431?)?

I appreciate any insight anyone can offer."

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AmyETPA created a topic in Distributions and Loans, Other than QDROs

Correcting a Corrected 1099R

"Original 1099R completed and filed and then corrected one filed, only issue is that corrected box didn't get marked. Any idea how to fix this? Now both are showing as income for him. This was a complicated in kind rollover and the original amount rolled over was overstated."

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