EA 2A 2004

[tope]

So, How did it go..

Am I the only one who thought it was a relatively straightforward exam?

[FoxtrotFool]

I thought it was a fairly straight forward exam, too. I was a bit short on finishing, though.

[Victor The Eagle]

I thought it was pretty similar to the '02 and '03 exams.

Since it's Sat. afternoon, it's safe to comment on specific questions. For the late quarterly penalty interest problem, I put that the answer was $0 since they paid the contribution before the end of the year. Anyone agree with me on this thinking? It just bothered me that a question required no calculations at all, but I'm pretty confident that it is $0

[rookie]

I thought it was a little easier than the old tests. The first half of the exam was easy, second half got more difficult. I also got 0 for the quarterly, the val int rate was greater than 175% FMR and cont made by 12/31. Strange answer, but I think it is right. Do we know if they will release it? I have heard they don't release them until we have results. That sucks. I remember all of my answers.

[rookie]

A few others that I remember:
1- True about the asset date change being a change in funding method.
2- True, plan was subject to AFC.

[waterpri]

personally I thought it was easy. But I guess it compared to the 2002 and 2003 exam.

Yes the answer to the question about the late interest charge was 0.

Also the triple true false about the Cash Balance Plan - Answer was none of the above.

Only question I did not know the answer to at all was the question about the amortization waiver. I do not even remember seeing that in Farber or in software polish.

[Victor The Eagle]

Now I am a little nervous because if everyone thought it was "easy", the pass mark will be high. I thought I did well, but we all know these things are graded on a curve.

[Smash Puny Human]

How do you do the extension of the amortization bases question?

Overall it was a pretty straightforward exam. The passmark will probably be pretty high.

[Darcy]

I thought this exam was harder than 2003. (Not necessarily "hard" but harder than 2003.) And just as long. I don't see any reason that the pass mark would be any higher this year than last year (63.75%)

What's the deal with these exams being so long? Is this just a test of how fast we can do these problems without making mistakes? That seems kind of stupid.

[Yank]

I agree that the late penalty interest was 0.

I don't remember the 3 true/false conditions for the cash balance plan. 1 was auto approval for change to Unit Credit. What were the others?

I also almost fell for a trick on the last problem of the exam--the one where the asset valuation method was changed. You needed to account for the AVA being outside the 120% corridor.

Also for the first 3 T/F questions, I remember getting 1-True, 2-True, 3-False. I think the only one that was false was about being exempt from quarterlies.

Any thoughts on any of the other problems? Any tricks anyone almost fell for or noticed?

[clanza]

Does anyone remember the problem, where their was a funding waiver granted for 2003 to make the credit balance zero? Does anyone remember the answer they got? I got answer C, 1,703,000. The discount rate on the problem was 8% which was a littile confusing after doing all the other problems at 7%.

It had an aggregate funding method. Was it correct to subtract the waiver from the pvb and assets to get the normal cost?

[Yank]

I don't remember my answer to that question, but I agree it was confusing to have an 8% val rate.

I think it is correct to subtract the the waiver base to get the PVFNC. I think you ended up with the same NC for 2004 as for 2003. The minimum was then 1.08 x (the NC + amort of waiver).

[Victor The Eagle]

I did it both ways (subtracting the waiver and not from PVFB) and Not subtracting got a answer not in line with the answer choices. I so assume taking the waiver out of PVFB was correct.

[mr. eigen vector]

u must take the waiver out when determining 412 nc...not 404 nc

[Victor The Eagle]

if there were other tricks, I probably fell for them because I don't remember too many.

The thing I kept getting hung up on was the stupid "before 2004/ after 2003" wording. My mind kept reading "2004" and was thinking that was the post- change assumption/amendment. I had to redo 2 problems because my brain wasn't reading these right.

If the pass mark is in line with '02 and '03, I think I will be okay. But then you never know what stupid arithmetic mistakes you've made until months from now.

[Fortal]

I thought this exam was harder than 2003. (Not necessarily "hard" but harder than 2003.) And just as long. I don't see any reason that the pass mark would be any higher this year than last year (63.75%)

What's the deal with these exams being so long? Is this just a test of how fast we can do these problems without making mistakes? That seems kind of stupid.

I agree. I think I have a shot for passing (even if a long one :wink: ), so this is not pure whining. In general I liked to study for this exam, and I think I even learned the material pretty well. I would probably do better if the exam was an "essay type" exam, like Courses 5 and 6. The SLM (silly little mistakes) can kill you in this multiple choice style, and they are virtually inevitable due to the reduced time allotted to each question and the pressure to keep moving. So it seems that in the end it boils down to who, among the well prepared folks (which should be a pretty high percentage), made the least number of SLM.

[Darcy]

I think this exam has been made WAY too easy and WAY too long and therefore difficult to pass. They need to test what we know, not how quickly we can re-amortize bases at different interest rates. Extra studying doesn't seem to really help - its just how well you can perform on exam day.

[EAwannaB]

I think the answer to the late interest question wasn't 0...though pretty sure that's what I did as well....but since it seemed to easy (they never give questions that easy!)..I double checked - and since the val rate was higher, you were suppose to use the current liability rate (which they gave) to calculate the late interest.

[Yank]

I thought the val rate was the highest of the 3 rates they gave. So the val rate is what you should use to calc the penalty interest.

And as long as the amount owed is paid during the plan year, you'll get 0 for the late penalty interest.

[slop]

Does the fact that question 1 referred to a cash balance plan change the answer to false? If I remember correctly the question asked if a Cash Balance plan can change to UC with automatic approval under 2000-40.

[brandonwnw]

I am sure Yank and the others are correct regarding the late quaterly interest payments. For late quarterly interest charges, the applicable interest rate is:

max(175% FMR, Val i%, CL i%).

Regarding the Cash Balance question, I didn't know the answer, but I feel fairly certain that this question would not have been on the exam if the Cash Balance feature did not have some effect on the answer.

[Yank]

A Cash Bal plan does not have automatic approval for change to UC. It's right there in 2000-40. Section 3.01(1) of Rev Proc 2000-40 to be specific.