Defined Benefit Answer Book, Fifth Edition

The brand-new Fifth Edition of Defined Benefit Answer Book provides expert guidance on the complex rules governing defined benefit pension plans.

In this comprehensive resource, you are guided, step by step, through the maze of factors that must be considered when designing and administering these plans.

Among the crucial questions answered are:

• Does a company's financial stability affect plan design?
• Can plans be designed to provide enhanced benefits to key employees?
• Are there ways of establishing hours of service without counting actual hours?
• Can a defined benefit plan be designed so that there is no discrimination testing each year?
• Can a defined benefit plan be designed to primarily benefit the key employees?
• Are there any advantages to having a defined contribution plan and a defined benefit plan together, and how are they administered?
• What must an employer do to satisfy minimum funding requirements after PPA?
• What restrictions are imposed if a plan is considered underfunded after PPA?
• What distribution election forms must be provided to a participant?
• How can a QDRO be prepared for a defined benefit plan?
• How are maximum benefit limitations determined under a plan?
• How are benefits calculated and converted to alternate forms of payment?
• How does the funding of a plan affect benefit distributions?
• What administrative issues must be considered for a plan that is covered by the Pension Benefit Guaranty Corporation?
• How are cash balance plans similar and different from traditional defined benefit plans?
• And much more!

The Fifth Edition to Defined Benefit Answer Book has been completely updated to include:

• A new chapter on funding-based benefit restrictions under the Pension Protection Act of 2006 (PPA)
• A completely revised chapter on minimum funding standards
• A complete analysis of the final Code Section 415 regulations and their effect on defined benefit plans
• An updated chapter on freezing defined benefit plans to help administrators through the rough economic times
• A revised chapter on administration of cash balance plans, including final and proposed regulations and a discussion of requirements related to age
• A revised chapter on Schedules SB and MB forms for 2008, 2009, 2010, and 2011
• Examples and information regarding the changes made to defined benefit plans under PPA; fully updated for the regulations issued to date regarding:
  • Minimum required funding changes
  • Maximum deductions of contributions
  • Employee notices
  • Consequences of underfunding
  • Distributions
  • Funding relief
• A chapter dedicated to defined contribution administrators who wish to learn about defined benefit plans - fully updated for PPA guidance
• Guidance on funding relief under the Pension Relief Act of 2010 (PRA)
• End-of-year valuation date guidance under PPA

• 1. Defined Benefit Plans: An Overview
  • Basics
  • Benefits
  • Funding of a Defined Benefit Plan
  • PBGC
  • Plan Termination
  • Administrative Timeline
• 2. Characteristics of a Defined Benefit Plan
  • General Characteristics and Qualifications of Qualified Plans
  • Coverage Requirements of Defined Benefit Plans
  • Benefits
  • Funding
  • Fiduciary Responsibilities
• 3. Plan Design
  • The Basics
  • Employer Objectives
  • Demographics
  • Plan Sponsor Structure
  • Types of Defined Benefit Formulas
  • Additional Limitations and Testing
  • Additional Factors
• 4. Hybrid Plans
  • The Basics
  • Target Benefit Plans
  • Floor-Offset Plans
  • Cash Balance Plans
  • Pension Equity Plans
  • Eligible Combined Plans
• 5. Special Employers and Plans
  • Small Businesses; Top-Heavy Plans
  • Tax-Exempt Employers; Church Plans
  • Governmental Plans
  • Multiemployer Plans
• 6. Eligibility—Coverage and Participation
  • Eligibility
  • Coverage Requirements
  • Participation
  • The Employer
  • Leased Employees
• 7. Measuring Service
  • The Importance of Service
  • Hour of Service
  • Computation Periods
  • Year of Service
  • Break in Service
  • Elapsed Time
  • Affiliated Employers and Transfers in and Out of Covered Service
• 8. Vesting
  • Vesting Schedules
  • Year of Service
  • Forfeiture
  • Plan Termination
  • Protected Benefits
• 9. Plan Benefits/Accrued Benefits
  • Benefit Formulas
  • Accrued Benefits
  • Benefit Service
  • Forms of Benefit Payment
  • Minimum Top-Heavy Benefits
  • Compensation Used for Benefits
  • Employee Contributions
  • Benefit Accruals After Normal Retirement Age
• 10. Safe Harbor Benefit Formulas
  • Definitions
  • Discrimination Tests
  • Covered Compensation
  • Adjustments and Actuarial Equivalency
  • Limitations
  • Past-Service Credits
• 11. Advanced Plan Design
  • The General Test
  • Normalizing a Benefit
  • Miscellaneous Testing Concerns
  • Fresh Starts
  • Past-Service Grants
  • Compensation Issues
  • Optional Testing Items
  • Cross-Testing
  • Combination Defined Benefit/Defined Contribution Plans
  • Case Study
• 12. Maximum Plan Benefits
  • Limitations on Annual Benefits
  • Limitations on Lump-Sum Payments
  • Compensation Limitations
• 13. Minimum Required Contributions
  • Minimum Funding for Single-Employer Defined Benefit Plans
  • At-Risk Calculations
  • Waivers of Minimum Funding
  • Changes in Funding Method
  • Amendments
  • Other Factors That May Affect Funding
  • Funding Relief for 2008–2011 Plan Year
  • End-of-Year Valuations
  • Asset Calculations
  • Funding Elections
  • Quarterly Contributions
  • Liquidity Requirements
  • Funding of AncillaryBenefits
  • Short Plan Year
  • Changing the Funding Method
  • Multiple Employer Plans Prior to PPA
  • Multiemployer Pension Plans
• 14. Deductions
  • Deduction Limits After PPA
  • Other Deduction Issues
  • Timing of Contributions and Deductions
  • Factors Affecting Deduction Limits
  • Deductions for Owner-Employee Sponsored Plans
  • Deductions of Plan Expenses and Fees
  • Short Years
  • Deduction Limits Pre-PPA
• 15. Valuation of Liabilities and Assets
  • Actuarial Liabilities
  • Valuation of Actuarial Liabilities
  • Calculation of Liabilities
  • Valuation of Assets
• 16. Census Data and Demographics
  • Census Data
  • Mortality Tables
• 17. The Role of the Enrolled Actuary
  • Definition of Actuary
  • Selecting Actuarial Assumptions
  • Actuarial Standards and Code of Conduct
  • ASOP Nos. 4 and 23
  • ASOP No. 27
  • ASOP No. 41
  • Other Standards of Practice
• 18. Cash Balance Plans
  • Safe Harbor Nondiscrimination Requirements Related to Benefits
  • Other Requirements
  • Nondiscrimination Regulations Related to Age
  • Vesting and Distributions
  • Legal Issues
• 19. 412(e)(3) Defined Benefit Plans (Formerly 412(i) Defined Benefit Plans)
  • Basics of 412(e)(3)
  • Nondiscrimination Requirements
  • Top-Heavy Requirements
  • Conversions
  • Advantages and Disadvantages
• 20. Ancillary Benefits
  • General Restrictions
  • Disability Benefits
  • Preretirement Death Benefits
  • Early Retirement Benefits
  • 414(k) Accounts
  • Medical Expense Accounts
  • Deferred Retirement Option Program
• 21. Distribution of Benefits
  • Administrative Requirements
  • Form of Benefits
  • Time of Payment
  • QJSA Rules
  • Death Benefits and the QPSA Rules
  • Suspension of Benefits
  • Required Minimum Distributions
  • Assignment and Alienation of Benefits
  • Taxation of Distributions
  • Lost Participants
• 22. Funding-Based Restrictions
  • Funding-Based Benefit Restrictions Under Code Section 436
  • AFTAP Calculations
  • Benefit Restrictions
  • ERISA Section 101(j) Notices
• 23. Qualified Domestic Relations Orders
  • General Rules and Considerations
  • Elements of a QDRO
  • Alternate Payees
  • Amount of Assigned Benefit
  • Form of Payment
  • Timing of QDRO Benefit Payment
  • Death of Parties
  • QDRO Policy and Procedure
• 24. Pre-PPA Funding Methods
  • Funding Method Basics
  • Unit Credit/Accrued Benefit Funding Method
  • Aggregate Funding Method
  • Individual Aggregate Funding Method
  • Entry Age Normal Funding Method
  • Frozen Initial Liability Funding Method
  • Attained Age Normal Funding Method
  • Individual Level Premium (ILP) Funding Method
  • Comparison of Funding Methods
  • Funding Method Requirements
  • Funding of Life Insurance and Other Ancillary Benefits
  • Changing a Funding Method
  • Consulting Issues
• 25. Pension Benefit Guaranty Corporation
  • Coverage
  • Premiums
  • Participant Notification Requirements
  • Reportable Events
  • ERISA Section 4010 Annual Reports
  • Section 4062(e) Event
• 26. Frozen Defined Benefit Plans
  • Notice Requirements
  • Funding Requirements
  • Regulatory Requirements
  • Alternatives to a Freeze
• 27. Plan Termination
  • Termination Procedures
  • Reporting to the IRS
  • Standard Terminations .
  • Missing Participants .
  • Standard Termination Audits by the PBGC
  • Distress Terminations
  • PBGC Benefits and Coverage
  • Bankruptcy-Related Terminations with the PBGC
  • Surplus Assets
  • Underfunded Plans
• 28. Mergers and Acquisitions
  • Corporate Transactions
  • Document and Operational Review
  • Ongoing Plan Considerations
  • Plan Transactions
  • Asset Allocation
  • Administrative Requirements
• 29. Fiduciary Responsibility
  • The Basics
  • Fiduciary Duties
  • The Fiduciary
  • Cofiduciaries
  • Prohibited Transactions
  • Fiduciary Liability
  • Investments
  • Correction of Plan Defects
• 30. Employee Communication
  • Benefits and Rights Under the Plan
  • Summary Plan Descriptions and Summary of Material Modifications
  • Annual Funding Notice
  • Suspension of Benefits Notice
  • Funding
  • Distribution
  • Plan Amendment and Termination
  • Miscellaneous
• 31. Government Reporting and Disclosure
  • Summary of Forms
  • Due Dates
• 32. Schedules SB and MB Issues
  • What Must Be Filed
  • 2008–2011 Schedules SB and MB
  • Line-by-Line Explanations for Schedule SB
  • Other Schedule SB/MB Issues
• 33. Financial Accounting Standards
  • Codification
  • ASC 715
  • ASC 960
  • Worksheets for ASC 715 and ASC 715 Accounting
  • ASC 715 Standard Pension Audit Confirmation Letter
• APPENDIX A - 2012, 2011, 2010, 2009, 2008, 2007, 2006, 2005, 2004, 2003, 2002, and 2001 Covered Compensation Tables
• APPENDIX B - Annual Annuity Purchase Rates
• APPENDIX C - Rates of Turnover
• APPENDIX D - 2011 Schedule SB and 2011 Schedule MB (Form 5500)
• APPENDIX E - Actuarial Code of Conduct
• TABLES
  • Internal Revenue Code Sections
  • Treasury Regulations
  • Revenue Procedures
  • Revenue Rulings
  • Notices, Letter Rulings, and Announcements
  • ERISA Sections
  • DOL Regulations, Letters, Releases, etc
  • Pension Benefit Guaranty Corporation Regulations, Letters, Forms, etc.
  • Accounting and Actuarial Standards
  • Pension Protection Act of 2006
• Table of Cases