The 30-year Treasury rate will remain the standard for converting accrued benefits
into lump sums and may, at the plan sponsor's option, be used to calculate current liability under Sec.
2004 2003 $ $ Accrued benefit
obligation, beginning of year 17,358 17,018 Current service cost 1,395 996 Interest cost 1,082 1,168 Benefits paid (1,584) (1,439) Actuarial loss 83 1,473 Corporate restructuring giving rise to: - Settlements - (1,858) Accrued benefit
obligation, end of year 18,334 17,358 Fair value of plan assets, beginning of year 15,931 13,660 Actual return on plan assets 1,812 2,466 Employer contributions 1,668 2,448 Employee contributions 645 654 Benefits paid (1,584) (1,439) Corporate restructuring giving rise to: - Settlements - (1,858) Fair value of plan assets, end of year 18,472 15,931 Plan assets consist of: % % Asset Category Equity securities 67.
31, 1993 should consider taking steps to calculate the present value of all accrued benefits
through that date, to document that FICA withholding of that present value was deemed to have been taken into account in 1993 for FICA purposes.
58) For example, if a nonhighly compensated employee receives accrued benefits
from a defined benefit plan at an aggregate accrual rate of .
In other words, the plan will not fail to meet the age-reduced dollar limit solely because the accrued benefit
derived from the purchase of service credits is included in the 415(b) test.
Thus, a company with a pension plan that is underfunded for accrued benefits
may have to report an additional minimum liability.
The trustee was required to make distributions to each participant each year equal to reasonable estimates of income and employment taxes attributable to the increase in the participant's vested accrued benefit
in the trust for each such year.
The court recognized that during this period, "the accrued benefit
payable at normal retirement age is effectively frozen," and older employees were more likely than younger employees to experience long wear-aways.
Under section 72(p)(2), a loan from a qualified retirement plan to a participant is not treated as a taxable distribution under three conditions: (1) The principal amount of the loan, when added to the outstanding balance of any other loans from the same plan, does not exceed the lesser of (a) $50,000 or (b) the greater of one-half of the present value of the nonforfeitable accrued benefit
of the employee under the plan or $10,000.
which in turn leads to a larger accrued benefit
at retirement measured
An alternative would be for employers to report the entire unfunded accrued benefit
obligation as a liability on the face of the financial statements, as in the private sector.
Furthermore, an age discrimination test will be satisfied if a participant's accrued benefit
is not less than the accrued benefit
of any otherwise identical younger employee.