Exploring Crises in Pensions, Government, and the Media
The CB blog series is now a book. For $73, including shipping, intorealpages turned those twenty blog posts into something for me to refer to or send to those who might be curious about the details of 401(a)(4) testing with a note to read this first .
Michael B. Preston, FSPA, EA, MAAA and recipient of the the 2017 Edward E. Burrows Distinguished Achievement Award died in 2024 at which time I posted this: May 7, 2024, 6:24:49 PM to American Society of Enrolled Actuaries: I remember PIX as being very useful back in the day though not sure who was behind creating it. [ ]
The book provides historical context of how Private Equity works with shout-ats to Trump, public pensions, and 401(k) investors.. By the end of the twentieth century, Britain s experiments with privatization had made it a profitable target for a financial creation in search of new opportunities. To a deal-hungry financier, water companies were a great bet: [ ]
The book provides historical context of how Private Equity works and for whom and why. debt pushdown. This means transferring liability for the loan to the company you ve just bought. You borrow the money; you spend it; and then you transfer the obligation to pay it back to the very thing you just spent it [ ]
Private Equity firms have been taking over TPA firms recently expecting explosive growth and apparently CPA firms as well in the same time period: . . This book looks like it will provide the reason. Before 2008, banks were the place to be, where you could do funky stuff, a former banker who now works [ ]
Based on 2024 5500-SF data, there were 765,048 total 5500-SF forms filed in 2024 for pension plans but only 38,387 were Defined Benefit plans with 26,082 in the subgroup of Cash Balance Defined Benefit plans and of those DB plans 70% relied on 401(a)(4) testing to prove nondiscrimination (80% for Cash Balance Plans). Would there [ ]
When you have younger HCEs who insist on getting as large a benefit as possible your only option could be Restructuring, as explained by perplexity.ai. Restructuring in 401(a)(4) testing lets you split one plan operationally into two or more component plans and test each component separately, as long as each component independently satisfies coverage under [ ]
The Code allows permitted disparity on compensation above an integration level (usually tied to the Social Security taxable wage base) to reflect the fact that Social Security replaces a higher proportion of pay for lower‑paid employees. Treasury regulations, specifically 1.401(a)(4)-7), describe “imputation of permitted disparity” as a way to convert employer-provided contributions or benefits…
The backbone of 401(a)(4) compliance testing is the EBAR which can be adjusted by Imputing Disparity which is supposed to mean: Impute: to lay the responsibility or blame for (something) often falsely or unjustly Disparity: a noticeable and usually significant difference or dissimilarity But what Imputing Disparity means for pension purposes is providing an extra [ ]
After the ABP is ≥70%, the remaining step is the Nondiscriminatory Classification Percentage Test, which asks if the plan s ratio percentage is above the employer s safe harbor percentage? If not, does it nevertheless satisfy the IRS s facts-and-circumstances standard by considering factors such as how close the ratio percentage is to the safe harbor and how [ ]
Once you ve: the next step is to perform the Average Benefit Percentage (ABP) calculation under the Average Benefits Test. If the average of the EBARs for all NHCEs is 70% or more of the average of the EBARs for all HCEs you pass this part with one more hurdle. Why 70%? Here is how chatgpt [ ]