The LA Advanced Pension Conference took place on January 21-22 at the Hilton Universal City Hotel in Los Angeles. Actuaries, administrators and other retirement professionals from around the country gathered to enhance their skills, learn new topics and collaborate with peers.
Day 1
The first day began with introductions and a general session workshop on ethics by Norman Levinrad and Karen Smith. In this session, industry relevant ethical dilemmas were raised by drawing analogies to various sports scandals. For example, when making a comparison to “Deflate-gate,” audience members were asked to consider these questions: If your staff is intentionally breaking protocol, do you have the adequate processes and procedures to know? Are you willfully or negligently failing to see problems? If you are accused of wrongdoing, does your reputation matter?
After the general session concluded, attendees were given the choice between three concurrent workshops in various content areas. For the first group of sessions, I chose to attend 415 with Multiple Annuity Starting Dates by Richard Block and Michael Preston. This session offered useful guidance and examples for handling these types of calculations.
The next group of workshops continued that afternoon. I attended Advanced Defined Benefit & Combo Testing workshop by Larry Deutsch and Kurt Piper. In this session, we looked at the various non-discrimination testing calculations using a cash balance plan as the foundation for the examples.
In the following session, Defined Benefit Regulatory Update by Kyle Brown, we reviewed the final hybrid regulations and the guidance for how to correct nonconforming interest crediting rates. In addition, we covered the updates and changes to the final 430 regulations.
For the final workshop of the day, I attended Cash Balance Issues by Kevin Donovan and Andrew Ferguson. In this workshop, the speakers discussed how 415 limits are implemented in cash balance plans. In particular, we looked at the impact of normal retirement age and when choosing certain assumptions may be advantageous.
At the end of the first day, conference members convened for the networking reception. Here attendees had a chance to mingle with colleagues and discuss the interesting topics of the day while sipping on cocktails and enjoying a variety of hors d’oerves.
Day 2
When the Friday morning sessions began, I attended PBGC Update with Kurt Piper and Karen Smith. In this session, the speakers informed the audience of the current requirements for Standard Termination Form 500/501 filings as well as the recently updated regulations on reportable events.
In the second group of workshops, I attended the session by Richard Block and Stephen Parks as they discussed Small Plan “Gotchas.” Here, the speakers addressed a few of the many nuances we encounter while working with small businesses. For example, we looked at how deductions are applied depending on the business entity type and the compounding effect of whether or not the plan is subject to PBGC coverage.
For the third group of workshops, I attended Cash Balance Interest Credits by Kevin Donovan and Thomas Finnegan. In this session we discussed the acceptable interest and market rates as defined in the final hybrid regulations. I was particularly interested in how to use different interest crediting rates for different groups of employees, and the potential advantages or disadvantages in this type of plan design.
After breaking for lunch, we had the final group of concurrent workshops. I attended Actuarial Challenges and Dilemmas, by Stephen Parks and Michael Preston. The speakers mentioned a recent issue regarding the potential for a plan disqualification due to a 412(d)(2) election. Judy Miller stated (via official IRS internal memo) that 412(d)(2) elections are allowable as a discretionary amendment if the amendment is made within the first 2-1/2 months of a year, increasing benefits for service during the prior year, but it is not operational during the prior year. Discussions ensued amongst attendees on how to interpret “not-operational” and which aspects of the code this specifically applied to.
All attendees convened for the final general session, “Ask the Experts.” Audience members had the opportunity to ask the panel general questions or ask their advice in resolving plan related issues. Unfortunately, the answers often result in the need for legal counsel or additional corrective procedures that can be timely and costly for all parties involved. For example, the panel was asked about a particular takeover case where there had not been annual valuations or related tax filings completed in a number of years, with little to no documentation. The initial reply from the audience was, “Why would you take over this plan in the first place? Where would you even begin? How much time, effort, and cost would be required?”
Kumar Ahuja was met with applause after responding that if the plan sponsor is willing to go through the necessary steps to bring the plan into compliance, then we have the responsibility to help. This message stayed with me as the conference adjourned and attendees headed their separate ways.
Thank you to everyone who helped make the 2016 LA Advanced Pension Conference a success. We hope to see you there next year!
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