2015 ACOPA Actuarial Symposium Wrap Up

The 2015 ACOPA Actuarial Symposium was held on August 7-8 at the Sheraton Chicago Hotel and Towers in the heart of the Windy City. The two-day event was jam-packed with workshops and discussions that were as lively and vibrant as the fireworks at the Navy Pier. 

Day 1 Sessions

Three panelists — Kyle N. Brown, Office of IRS Chief Counsel; Jim Holland, Chief Research Actuary at Cheiron, Inc.; and Judy Miller, ACOPA’s Executive Director — got the ball rolling early Friday morning with a regulatory update session that provided an overview of the recent IRS guidance on the following subjects: 

• Mortality table update (Notice 2015-13)
• De-risking and lump sum offering to annuitants (Notice 2015-49) 
• Determination Letter program changes (Announcement 2015-19) 
• Cash balance plans volume submitter program (Rev. Proc. 2015-36)
• Multiemployer plan guidance (Rev. Proc. 2015-26) 
• EPCRS changes (Rev. Proc. 2015-27)
• ERISA §4010 regulations
• PBGC Form 501 Instructions (proof of distributions)
• PBGC Reportable events forms (revisions to Forms 10, 10-A and 200) 

Although the views and opinions expressed by the panelists “did not necessarily reflect the official policy or position of the IRS or any other agency of the government,” the audience found them quite insightful and helpful.

The second workshop, “Correction Issues,” featured panelists Kevin Donovan, Managing Member and Founder of Pinnacle Plan Design, LLC; and Mark Dunbar, President of Dunbar, Bender & Zapf, Inc. Via real-life case studies, the audience learned and discussed how to ensure compliance in plan design and operation when the following issues arise: 

• NHCE who actually was an HCE
• Missing employees who show up retroactively
• Ambiguity in top-heavy provision
• Drop in HCE compensation
• Demographics change (allowable -11(g) amendment)
• Unexpected HCE deferral

Donovan and Dunbar also discussed the pros and cons of restructuring (breaking a single plan into multiple component plans) for coverage and non-discrimination testing and illustrated a few cash balance plan issues related to: 

• Annuity election at retirement
• Changes in interest crediting rate changes
• Interest crediting rate — rate of return
• Late retirement
• Features not allowed in pre-approved plans (Rev. Proc. 2015-36)

After a lunch break, Larry Deutsch, founder of Larry Deutsch Enterprises (and this year’s recipient of the Ed Burrows “Humdinger” Award — see below), was joined by Sara DeFilippo, head of the Defined Benefit Plan Unit at Dunbar, Bender & Zapf, Inc. in presenting the third workshop, “Testing Issues.” This interactive session started out with such seemingly simple concepts as EBARs (Deutsch illustrated that things are not always as simple as they seem, though) and proceeded to use case studies to analyze various strategies in performing DB/DC non-discrimination testing. 

In the fourth workshop, aptly named “Actuarial Potpourri” (in French “pot” has the same meaning as in English and “pourri” means “rotten”), Jim Holland and American Retirement Association President Tom Finnegan provided their insights into a number of tricky situations arising in plan takeovers, discussing such unpleasant topics as: 

• High-25 HCE and AFTAP restrictions on lump sum distributions
• Post-NRA accruals in cash balance plans

Due to both speakers’ superb knowledge of the subject matter, the issues discussed no longer seemed as “pourri” anymore by the end of the session. By the way, if you happen to see “pot-pourrie” on a restaurant menu, they might be referring to its other meaning in French (a type of a Spanish stew with a wide variety of ingredients). 

The last workshop of Day 1 was devoted to the plan design and proposal process. Kevin Donovan and ACOPA Past President Mary Ann Rocco, founder of Mary Ann Rocco Actuarial Consulting Services, identified various retirement strategies to offer prospective clients and discussed the key elements to be included in the proposal process. A special emphasis was made on the importance of communication between all the parties involved prior to and during the plan implementation process. 

The last but not the least event of Day 1 was a networking reception held at the Lakeview Room. The attendees could enjoy the views of the Chicago River and Dusable Harbor while imbibing delicious cocktails and feasting upon a variety of hors d’oeuvres. While each attendee was issued two drink tickets at the door, the actual drink consumption experience varied widely. 

Day 2 Sessions

The conference room atmosphere on early Saturday morning had a somewhat morbid feel to it. While the events of the prior night might have had something to do with it, the primary reason was the discussion of the new mortality tables and the concept of the generational mortality presented by Grant Thornton LLP actuary Raymond D. Berry. The speaker shared his experiences in implementing the new mortality tables for accounting disclosures and provided up-to-date information regarding the timing and implementation of the concept of generational mortality for funding and lump sum calculation purposes.  

The second workshop of the day was ACOPA’s favorite “Ask the Experts!” session. Kyle N. Brown, Kevin Donovan and Tom Finnegan took the stage and presented their views and opinions on a variety of challenging defined benefit plan questions thrown at them by the merciless audience. 

The next item on the agenda was arguably the ACOPA’s second most favorite: the presentation of the Ed Burrows “Humdinger” Award. This year’s recipient, Larry Deutsch, a truly remarkable and outstanding person, shared his memories of Ed in a touching and heartfelt speech. 

The third workshop of Day 2 was devoted to plan terminations. Drew Forgrave of Jacob, Haxton & Boord, LLC and Michael B. Preston of Preston Actuarial Services, Inc. covered advanced practice topics such as plan termination procedures, government filings, notice requirements, distribution processing and IRS and PBGC audits. The presenters also addressed various problems that can occur with plan terminations and suggested potential solutions. 

Workshop 9 of the symposium was all about ethics. ACOPA President Lynn Young and President-Elect Karen Smith presented a series of case studies and questionnaires that let the attendees identify their personality traits and habits that impact their approach to ethics. Knowing if you are a “Big Picture Bob,” “Live and Let Live Liz,” “Independent Ivan,” “Introverted Ian” or maybe “Slippery Sam” may help to decrease the likelihood of making ethical mistakes. 

The last workshop the event was devoted to the topic of TPAs and actuaries working together. Mary Ann Rocco presented her perspective on ways to improve communication between TPAs and actuaries and how to assist the TPAs to identify the clients well suited for implementing a defined benefit plan. The audience was engaged in a lively discussion and gained a few valuable insights.