ASC Winter 2010 Newsletter

In this issue:
DC/401k Training Videos List

New Training Videos Available Now!

In just 5-10 minute segments you and your staff can review or even learn from scratch ASC’s DC/401(k) and Compliance Testing Systems. Our new video format allows you to control your training experience. For example, you can go directly to a 5-minute segment on HCE calculations, rather than watch the complete compliance video.

Users can listen to instruction from basic navigation through full valuation calculations and compliance testing. In addition, individual topics such as using the Budget Routine and downloading data from Insurance companies are included. Many topics covered here also apply to the DB system, including Navigation, Plan Management, Grids and Formulas, Importing and Exporting data, Reports, and Table Maintenance. This video training series compliments the existing training manuals that may be found under Help-Manuals from your ASC system. These are excellent tools for new users to learn the system, as well as a refresher for existing users. Once you log in to our website using your client login, go to the Training tab, then select either the DC/401k Recordkeeping Training Series or the Compliance Training Series.

Defined Benefit System – Tips from our Actuaries

We have a few tips from our actuarial staff to share with you: 1) For plans that have had the Normal Retirement Age amended, users should note the following when changing the system coding:
  • Anyone in the plan with a status code “A” needs to be changed to a status code “C” in order for their NRA and NRD to be recalculated. This can be done for all employees at once using the Grid’s Set Column Data feature.
  • In light of the no-cutback rule, you will need to calculate an actuarial equivalent of the beginning of year accrued benefit payable at the new retirement age. As long as Actuarial Equivalence does not equal 417e, you can go to Calculations/Individual Employee/Actuarial Equivalence to calculate the actuarial increase to the accrued benefit. You should be on the case that was run under the original retirement age. You can input the new retirement age & new 415 limit in the right hand column and then hit enter through the screen. At the bottom the lump sum amount & the actuarial equivalent benefit will be displayed.
  • Plans should be coded to use a “fresh start” to calculate an increase in the accrued benefit (if below 415) this year. Without the fresh start, the grandfathering of the prior accrued benefits could equal or exceed the accrued benefit for this year and negate any increase under the formula.
  • If the plan is being combined with a DC plan for nondiscrimination testing, the DC plan should reflect the same retirement age as the DB plan.
2) When doing combined DB/DC 401(a)(4) testing, in addition to combining plans with the same valuation date, you can also combine an end of year DC plan (e.g. 12/31/09) with a beginning of year DB plan (e.g. 1/1/2010). 3) Remember to download Yield Curve and Segment Rate values from our website monthly. Login, go to the Download tab, Tables section, and select the file “yieldcurveandsegmentrates.zip”. Specific instructions for updating your system with these rates are in the file yieldcurveandsegmentratesimport.doc, also downloadable from the Tables section of the Download tab. 4) When contacting support, remember to also review the readme documentation posted with our system patches on our website each Thursday evening. The DB system, in particular, is often updated as we add programming enhancements for PPA. While we enjoy discussing the intricacies of the expansive DB changes, we are limited in our ability to make individual plan recommendations. Since we are not the designated plan actuary, don’t have the plan document nor know the administrative practices of the plan, our function is restricted to system coding discussions.

Restatement Period for Pre-Approved Defined Benefit Plans

  The IRS is expected to open the period for restating pre-approved defined benefit plans this spring. The IRS has already issued informal e-mail approval for many pre-approved defined benefit plans (including the ASCi Volume Submitter Defined Benefit Plan) and should be issuing final opinion and advisory letters to all prototype and volume submitter sponsors in the near future. Once the IRS issues final approval letters to all plan sponsors, it will open the period for restating pre-approved defined benefit plans for EGTRRA. We expect the IRS to open the EGTRRA restatement period for pre-approved defined benefit plans on May 1, 2010 (which would coordinate with the April 30, 2010 closing of the restatement period for pre-approved defined contribution plans). The IRS provided a two-year restatement period for pre-approved defined contribution plans, but has indicated it may shorten the restatement period for pre-approved defined benefit plans since there are fewer plans that need to be restated. Once the IRS opens the EGTRRA restatement period for pre-approved defined benefit plans, we will be updating the DGEM system to include the final approved ASCi Volume Submitter Defined Benefit Plan. All defined benefit plans will have to be restated onto an EGTRRA-approved defined benefit plan within the restatement period once the IRS opens the program. We will be issuing updates as more information becomes available from the IRS.

Four more hi-tech professionals join ASC!

ASC’s Development Division has hired four new programmers to expand its technical expertise. ASC welcomes programmers Dror Maor, Mark Novick, Hanna Geisler and David Bleier. “To provide our clients with the best products and services, we look to hire the top talent in the industry,” explains Alan Gould, President of ASC. “We’re thrilled these four engineers are able to join our team and help us continue to offer our clients the highest quality pension systems.” Dror Maor has a BS in Computer Information Systems with honors magna cum laude from Michigan Jewish Institute. Dror is joining the ASC team after having spent most of the last 12 years as senior developer and project manager in the automotive industry in Detroit. One of Dror’s development projects in Detroit was an application that supplied parts to a 24/7 truck assembly factory, which if it were to crash, holding up the assembly line, Dror’s team would be fined $17,000 per minute (!) by Chrysler. It has yet to fail. While working for a Ford key supplier, Dror managed the maintenance and upgrading of the system that controlled mechanics’ engine computer tests. Dror is married and has six children. In his spare time he enjoys reading and helping out local community organizations. Mark Novick most recently spent 13 years as software engineer at Hewlett Packard where he helped develop a load testing product among other things. He has an undergraduate BS in Computer Science and Math from MIT and a Ph.D. in Computer Science from Cornell. Prior to HP, Mark worked as a researcher at the IBM Research Center in Haifa, Israel where he did optimizations for the compiler for the AS/400. Mark is married with 4 children and enjoys reading and hiking in his down time. Hannah Geisler joins the team with 19 years experience in teaching university level computer science. She has a BS and MA from Brooklyn College as well as additional coursework at Hebrew University’s School of Computer Science. David Bleier is a consultant specializing in .net, Java, Javascript, PHP, and Python. He has an undergraduate BS in Computer Science from Dartmouth. In the past, David worked in IBM’s Global Services consulting division where helped develop a Java-based server-side rate quote engine for a NYC auto insurance company and a Java-based server-side self certification program for UPS for their large shippers He also maintained and extended Java-based music collaboration software for eSession.com. ASC welcomes its newest team members and wishes them the best of luck!

Looking behind the Numbers – An Interview with Diane Storm, Lead Actuary at ASC.

Diane and Mel Storm Diane Storm, ASA, FCA, MAAA, EA has been working at ASC since June 1, 1982. A Southern California native, she has been living in Detroit since 1986 with her husband, who teaches religion at Rochester College. They have four boys, two of whom are married and this past December they welcomed their first grandson, Jackson James. Diane majored in Math at UC Santa Barbara. Her first job was at Towers, Perrin, Forster & Crosby where she worked as an Actuarial Analyst on large plans for a total of 7 years. She was living in Dallas when the ASC offer came though and happily moved back to southern California to take the job. Diane leads the three-person actuarial team at ASC doing some programming, user training and documents but mostly providing support. Q: What’s a big challenge facing the ASC actuaries right now? A: The Pension Protection Act of 2006 has presented a challenge in that it requires a total rewrite of the DB system and we are still working on this. Thankfully, ASC has kept up and because we are up to date we can accommodate new clients in this area. Q: How do you work with and lead the other actuaries on the team? A: I help with prioritizing and dividing up the work. Tom and Judy provide a lot of the support and I will get involved if an issue comes up that needs my expertise. I am also available to consult with them on any other issues they might have. We meet together on a weekly basis and talk every day. Q: What lessons have you learned throughout the years that you keep with you today? A: One lesson I will always keep with me is that honesty and integrity are very important so I always try real hard never to exaggerate or deviate from the truth. If I don’t know something then I just say “I don’t know,” even though I would like to provide the client with an answer that would make him happier. Respect is another big one. Working in support, I find problem solving is really helped when you respect the client as the intelligent and important person that they are. Q: What’s a good book you’ve read that you would recommend? A: A mystery novel by a Michigan author, Steve Hamilton, A Cold Day in Paradise. I just gave it to my husband to read. Q: How do you manage stress? A: I swim 3 days a week, take walks with my husband and do yoga. Q: What do you like to do outside of work? A: Both my husband and I are involved with our church. We teach Sunday school and I interpret for the deaf there. I am a member and treasurer of the Madrigal Chorale of Southfield. I also like to crochet, knit, and do needle work and sometimes give these as wedding or baby gifts. As a matter of fact, I knit a blanket for my grandson who was born in December. Q: What keeps you enthused about your career? A: I really love math and I am so grateful to be able to daily use this skill that I love and went to college to learn. I became a retirement actuary to begin with because I felt that this was a way I could use my math skills in order to help people. In some way, I’m contributing to the welfare of people by helping them have some retirement security. Q: Can you name a skill or practice that has contributed to your success? A: My math skills in combination with a fairly normal, social, extraverted personality. I enjoy working with and helping people. Q: Can you sum up how you feel about working at ASC in one or two sentences? A: I like working for a company where all of the employees are committed to doing their best. It is a pleasure working with the quality employees that I am surrounded by. Between working on the Pension Protection Act and providing client training and support, Diane says there aren’t many dull moments on the job. She is grateful for being busy but also thoroughly enjoys her vacations. She has recently been to Nashville to visit her mother and is looking forward to attending a family wedding in Kentucky this spring. This summer Diane will be going on a mission trip to Honduras with her church, where they will be helping out at a school and a medical clinic as well as distributing many pairs of eyeglasses. She’s been practicing her Spanish and has even subscribed to People in Español! ASC salutes Diane Storm’s invaluable dedication and many contributions to the company. Thank you Diane!