DB Information

Administrative Issues of Defined Benefit Plans

> DB Syllabus [PDF]
> DB Course Overview
> 2009 Education and Examination (E&E) Program Changes (ERPA Designation Impact)
> Exam Requirements & Procedures
> Exam Registration & Fees
> Required Reading and Supplementary Study Tools
> Study Guide References & Errata
> Subject Matter
> Deadlines & Fees
> Grading Process
> Register online

Related Links : Register for Exams : Candidate Corner : Study Guide References print page

Course Overview

As you study and prepare for the 2008 DB Examination, keep in mind that it only covers law and regulations as of August 1, 2007.

This course builds on the material learned from RPF 1 & 2, as well as DC-1. Those courses deal with basic terms and definitions within operation of a private employer’s voluntary qualified retirement plan. They include fundamentals such as – discrimination, coverage, preferential tax-treatment, reporting and disclosure and vesting among others.

This course concentrates on administrative issues of defined benefit plans. It is primarily meant for the administrator, rather than the plan actuary. It covers a broad range of topics at an intermediate level. Further coverage of defined benefit plan topics is found in courses C-3, C-4 and A-4.

ERISA law along with IRS, DOL, and PBGC regulations provide a framework for the rules that govern qualified plan operations. These rules often apply to both defined benefit and defined contribution plans. The nature of the defined benefit promise is fundamentally different from the defined contribution promise. This difference requires mathematical concepts that allow for the funding of promised benefits. Basic to this is the concept of the present value of an accrued benefit under a plan. Present value calculations require the use of actuarial assumptions such as interest rates and mortality tables.

The plan administrator determines participant accrued benefits. After participants terminate or retire from employment with the employer, a determination is made of their vesting status and the current or deferred benefit payable under the plan. The administrator must consider pay and service history to arrive at participant accrued benefits. These benefits may need to be adjusted for maximum benefit limitations and / or top-heavy and lump-sum minimum thresholds.

This course introduces various types of defined benefit plans and various types of benefit formulas. This includes hybrid plans which incorporate some features usually specific to defined contribution plans.

Other issues covered in the course at an introductory level include – plan termination insurance (PBGC), Qualified Domestic Relations Orders (QDROs) which permit a portion of a participant’s benefit to be paid to a former spouse or other beneficiary, and issues that must be dealt with when benefits become payable.

This course also considers the importance of the defined benefit practitioner’s complying with ASPPA’s Code of Professional Conduct which aims to further the ethical behavior of ASPPA members.

2009 Education and Examination (E&E) Program Changes (ERPA Designation Impact)

Please refer to the 2009 Education and Examination (E&E) Program Changes webpage for information on the new and exciting enhancements to ASPPA’s educational programs.

Exam Requirements & Procedures

It is presumed that a candidate sitting for the DB examination will have the knowledge of material covered in the Pension Administrator (PA) or Retirement Plan Fundamentals (RPF) series. In addition, much of the material covered in the DC-1 exam applies to DB plans as well as DC plans, so it is recommended that the candidate pass DC-1 or be familiar with the material prior to taking the DB exam. All required reading material is listed in each topic which can be found by downloading the syllabus. Candidates have two and one-half (2 ½) hours to complete this 65 multiple choice examination. Candidates will receive a grade immediately upon completing the DB exam at the testing center. The use of a calculator will be permitted if it conforms to the required specifications.

Exam Registration & Fees

It is the candidate’s responsibility to review all of ASPPA’s exam policies and procedures which can be found in the ASPPA Program Catalog or on Candidate Corner. You will also find additional helpful information such as test taking tips, directions for contacting your nearest Prometric testing site to schedule examinations, exam windows and dates and much more.

Exam Registration - Register online or download the Exam Registration Form and follow the directions on the form to fax or mail your registration. Confirmation e-mails will be sent to candidates beginning approximately eight weeks prior to the opening of an exam window. Once you receive your confirmation e-mail from ASPPA, you will need to contact Prometric to schedule your proctored exam appointment. Detailed instructions on scheduling your appointment will be included in the confirmation e-mail. Exams are given at Prometric Testing Centers. It is the candidate’s responsibility to schedule an exam. We strongly recommend you schedule an appointment upon receipt of the confirmation letter as testing centers fill up quickly. To find a Prometric Testing Center visit http://www.2test.com.

Exam Fees - To qualify for early registration, registration forms accompanied by the early registration fee must reach the ASPPA office no later than April 17 for the spring examinations and September 19 for the fall examinations. To qualify for final registration, registration forms accompanied by the final registration fee must reach the ASPPA office no later than May 14 for the spring examinations and October 31 for the fall examinations. There is a non-refundable $199 early/$259 final registration fee per exam for members and a $225 early/$285 final fee per exam for nonmembers. For more information visit the Exam Schedule & Fees page.

Required Reading and Supplementary Study Tools

Unless noted all study materials can be ordered by downloading the Publications Order Form and following the instructions to phone, fax or mail your order form and payment. You can also order your publications using the ASPPA Bookstore.

Required Reading
Administrative Issues of Defined Benefit Plans - Study Guide, 2008 ed.. Arlington, VA: ASPPA.

Table of Contents
Chapter 1: Introduction to Defined Benefit Plans
Chapter 2: Determining Accrued Benefits
Chapter 3: Present Value Calculations and Alternate Forms of Benefits
Chapter 4:Hybrid Defined Benefit Pension Plans
Chapter 5: Post-Normal Retirement Age Accruals
Chapter 6: Early Retirement, Disability, Ancillary and Incidental Benefits
Chapter 7: Benefit Limitations under IRC §415
Chapter 8: Coverage, Participation and Nondiscrimination
Chapter 9: Permitted Disparity
Chapter 10: Qualified Domestic Relations Orders (QDROs)
Chapter 11: Distribution Issues
Chapter 12: Special Events
Chapter 13: ASPPA Code of Professional Conduct
Appendices:
     Dx Tables
     Monthly Life Annuity Purchase Rates

Defined Benefit Answer Book Fourth Edition, by Neff McGhie, New York, NY: Aspen Publishers, a division of Wolters Kluwer, Law & Business. (There is a 2008 paperback Supplement to this Fourth Edition, however, this 2008 exam will generally not rely on material from the Supplement. The Third Edition of the Defined Benefit Answer Book is outdated and differs considerably in arrangement from the Fourth Edition and thus should not be used with this syllabus).

To order this publication, visit our online bookstore or download the publication order form. Please refer to the 2008 Publications Order Form for publication listings and prices.

Supplementary Study Tools
The study tool below is not required preparation for the DB examination. It is offered as an additional study aid and requires separate purchase and/or registration fees.

2007 DB Practice Exam – available for $25 online through the online bookstore or download the publication order form. Please note this is the 2007 DB practice examination; if you ordered the 2007 practice exam last year you do not need to reorder this practice exam.

Study Guide References & Errata

For updates to ASPPA’s publications and examinations please visit: http://www.asppa.org/education/ed_study_guide_updates.htm. Please stop by regularly as new updates are posted.

Subject Matter

The following topics are included in the syllabus:

• Function of PBGC
• Types of DB benefit formulas
• DB accrual rules
• Calculation of accrued benefits
• Accruals under top-heavy plans
• Protected benefits
• Calculation of present value of accrued benefits (PVAB)
• Actuarial equivalence related to alternate benefit forms
• Distribution options
• Hybrid plans: cash balance, pension equity, floor-offset
• Post normal retirement age accruals
• Ancillary benefits
• Coverage, participation, nondiscrimination testing (not general testing)
• Nondiscrimination safe harbor formulas
• Permitted disparity rules
• QDROs
• Distribution requirements (including retroactive annuity starting dates, required minimum distributions, and relative value calculations)
• Participant notifications
• Top 25 employee distribution restrictions

Download and review the 2008 DB syllabus for detailed information on topics covered on the exam, learning objectives, exam topic weightings, etc.

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