Our philosophy for coverage and nondiscrimination testing has always been “everything passes, some plans just take a little longer to prove it”. That was put to the test recently for one of our law firm clients: an unusually young new partner was causing their §401(a)(4) nondiscrimination test to fail. We emptied the whole toolbox on […]
We’ve been following the recent saga where the PBGC is not allowing some employers to correct their 2009 PBGC filings for apparently innocent mistakes. Now some congressional heavyweights are adding their voice to the mix. Under the new post-PPA PBGC filing rules, an employer may make an election to use either the “Standard Method” or […]
Over the past couple of years, the GASB (Governmental Accounting Standards Board – they write the public employer accounting rules) has started the process of updating the accounting rules for public employer pension and retiree health plans. They issued an invitation for ideas/comments in 2009 and now we are getting our first sneak peek at […]
Historically, the IRS has required that plan documents for terminating retirement plans be amended to reflect all legal requirements enacted up through the plan termination date. However, there was some uncertainty as to whether the “new” 5- and 6- year plan restatement rules actually required plan sponsors to: Entirely restate the plan document upon plan […]
Almost every employer-sponsored retirement plan (whether it’s a pension plan or a 401(k) plan) must satisfy certain nondiscrimination tests set forth in the internal revenue code. The IRS mandates these tests to ensure that if an employer is getting retirement plan tax deductions, then the plan should be designed so that benefits are not skewed […]
Last week, the HHS published an interim final rule for the new Early Retiree Reinsurance Program (should we call it ERRP?). In our first post on this, we noted that a lot was still unknown. There still is, but it’s becoming clearer. The White House fact sheet says “Employers can use the savings to either […]
A full valuation (measurement) of GASB 45 liabilities is required every 2 to 3 years, depending on the size of the employer. In the years when actual measurements are performed, the GASB 45 results (ARC, Annual OPEB Cost, and Net OPEB Obligation) are fairly straightforward to calculate. However, there is often confusion about what to […]
Earlier this year, the Department of Labor and the Treasury put out a Request for Information (RFI) on lifetime income options for retirement plans. Last week was the deadline, and they got some great responses. My favorite is from the American Academy of Actuaries. Not surprising, since I’m an actuary. But they pointed out something […]
Many small cities and governmental entities (less than 100 employees) are still figuring out their GASB 45 liability or whether they even have a liability. GASB’s Alternative Measurement Method (AMM) is a simplified alternative to performing a full actuarial valuation, but even the AMM has a cost that some very small entities would prefer to […]
There’s a great article on funding OPEB liabilities by the MN State Auditor’s office. It’s written for counties, but it applies as well to cities, school districts and other government employers in Minnesota. Whether or not to pre-fund OPEB liabilities isn’t a no-brainer. It’s standard practice for public pensions, and it’s required for private pensions. […]
