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#1




EA2b Partial Study Guide  Available for Download
I'm just curious  did anyone use this last year?
Was it helpful? Should I keep it available? Note that it has NOT been updated since last year  if anyone studying this time around wants to update it  or add to it  please let me know. David Farber was kind enough to review my material before I released it  and if asked, he would likely review any additions or edits.
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Hakuna Matada 
#2




Yes
Yes, I found it very helpful.

#4




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Hakuna Matada 
#5




I found your notes to be very good and very helpful; I only wish is that you had done all of the material, which I will willingly pay for.

#6




Quote:
I can tell you however  that putting those chapters together did more for me in terms of passing the exam than anything else. By concentrating on each topic area  trying to make sure I was being thorough  and well understood  it REALLY cemented the stuff in my head for the exam. So again  if anyone is interested in taking this approach and adding to or updating the study guide  I recommend it as a great way to study. Just let me know if you are interested. There's no money involved  just your name added to the credits. But you never know when that could come in handy!
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Hakuna Matada 
#7




I have been using this guide some and have found it very useful. I only wish it covered all the topics!
Anyway, I think I have 2 errata to share and then I have a question. In the practice exercises following Chapter 4, I believe the answer for #1 should be $111,788  the 415 limit should be reduced for 8 years of participation rather then 7. In example 71, I think the unfunded vested benefit amount is 748,006, making the PBGC premium $10,066. My question is about Example 85: In determing the PC5 benefits for Jay and Finch, we have to find their vested benefit. I agree with the calculation of the accrued benefits ($875 for Jay, and $525 for Finch). Then the solution shows those amounts multiplied by their vesting percentages (60% for Jay, 20% for Finch). But isn't some of their benefit due to employee contributions, which are always 100% vested? So shouldn't we project their EEcontrib account balance to 65 at the 30year Treasury rate and then take the PV? For example, if the 30yr Treas is 5.00%, then Jay's account balance at 65 would be 850*(1+.05)^30=3,674. Then divide by a65 to get 3,674/11.794=312. So they Jay's vested benefit would be 312 + 60%*(875312)=650. Am I missing something? 
#8




Thanks Mr. Boh  I appreciate your letting me know about the errata.
And as to example 85, I agree with you. In this example, I wanted to have the mandatory contributions to show the way the assets are allocated  but I forgot about the vesting issue. I really don't want to put the vesting calculation into this example  because it's complicated enough already  and the vesting calculation isn't part of what I was trying to show here. So I'll have to think about how to restructure the example. In the meantime  just ignore that issue  as the example is really supposed to focus on the asset allocation.
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Hakuna Matada 
#9




in examplel 8.5 when we calculate Brown's PC 3 liability why don't we multiply the 892.5 by 80% as he only has 6mths of service at age 62 and is not 100% vested? Is it because PC3 liability does not care bout vesting? Is it because he has a full 9 yrs at DOPT?
I also do not understand what it means in Rev Ruling 8648 that a participants accrued benefit includes: early retirement subsidies, optional forms of benefit, and qualified preretirement survivor annuities. This comes into play in determining the PC 6 liability. Please someone explain this to me. Lastly in Example 8.7 what if the assets for green were 40k? Would the amount the PBGC is liable for be 52530  40000 or would it be (52530  3000 (PC1)  2000 (PC2))  40000? Please help. Thanks. Last edited by drctypea; 03182005 at 04:49 PM.. 
#10




Quote:
I will clarify my example to allow for 100% vesting upon eligibility for ER  as I didn't intend for that to be an issue. Quote:
Then when you calculate the present value of that benefit  you don't use $1,000 times a deferred to 65 annuity factor  you would use $1000 * .85 * an immediate annuity factor  as this is a more valuable benefit. The same is true if the plan offers to pay the accrued benefit as a joint and survivor benefit with no reduction in the amount  this is a subsidy  and must be accounted for in the present value calculations. Does that help? Quote:
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Hakuna Matada 
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