kgr12

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About kgr12

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  1. Thanks for that reply. I have seen more than a couple of nonprofit 457(b) plans use a NRA earlier than 65 even when they don't have a DB or MPPP, and wondering if I was missing something.
  2. I'm reviving this post since I had a related question that is more generalized in nature. Specifically, if the employer doesn't maintain a defined benefit plan or a money purchase pension plan, does the plan's normal retirement age HAVE to be age 65 or later (up to 70 1/2)? In other words, is the only way to have an NRA lower than 65 is for the employer to also have a defined benefit or money purchase pension plan (assuming the unreduced benefit standard is also met of course)? That sure seems to be the inference of 1.457-4©(3)(v).
  3. I know there have been quite a few discussions in this forum about the extent to which mid-year amendments can be made to safe harbor plans and "maybe safe harbor" plans, but my question has to do with the end result if the IRS were to view any such amendment as outside the scope of what's considered "acceptable." Is the effect merely loss of the safe harbor, or could it also affect the plan's qualification? I'm dealing with a maybe safe harbor plan that will not be using the safe harbor in 2015, so if adopting a particular amendment results in a worst case scenario, what exactly is that worst case scenario? Loss of ability to be a safe harbor plan in 2015? (And in this circumstance, where it's a maybe safe harbor that wouldn't be utilized, should I care on any level?) Plan disqualification? (In which case I obviously do care!) Anything else? Thanks!
  4. Belgarath, thanks for pointing that out about that provision applying only to BRFs. It's been awhile since I looked at/thought about these regs, and I completely glossed over the distinction. The context that drove the question was a 410(b) benefitting under the plan failure arising out of an employment on last day of plan year requirement, which I suppose goes to contributions and benefits rather than BRFs. If that's correct, I suppose it's also correct that one could correct for such a failure each year/any year as necessary, and the correction need only be made applicable to that year?
  5. Two of the "conditions" established in 1.401(a)(4)-11(g)(3)(vi) for doing a correcitve amendment are: (A) that it not be part of a pattern of amendments to correct repeated failures; and (B) that the correction remain in effect until the end of the first plan year after "the date of the amendment." With respect to (A), at what point does it become a pattern? With respect to (B), what is the date of the amendment - its effective date or the adoption date? It seems to me that depending on how you answer that, the amendment would remain in effect for either 2 years or 3 years (e.g., in 2013, a corrective amendment is timely adopted with respect to the 2012 plan year; if that "date of the amendment" is the date it is effective, it would have to remain in effect for 2012 and 2013, and if it's the date adopted, it would have to remain in effect for 2012, 2013 and 2014).
  6. Great thought - thanks!
  7. I noticed this topic from a few years back and noticed the comment from jquazza that "Surely, you couldn't give it to a participant who is 0% vested and terminated during the plan year being corrected, but if the participant is still accruing vesting at the end of the PY, that shouldn't be a problem." Sungard Relius posted and article on its website earlier this year suggesting that in the case of a nonvested separated participant you can avoid the problem by simply vesting that participant in the corrective contribution: "Typically the drafter of the 11(g) amendment will avoid this issue by vesting the participant in the allocation." That article can be found here: http://www.relius.net/news/TechnicalUpdates.aspx?ID=962 jquazza's comment doesn't exactly contradict Sungard's statement, but certainly comes close. Any thoughts?
  8. I'd appreciate input on the following two issues: 1. In determining whether the payment of deferred compensation on account of a service provider's death is late, which of the following taxable years is the correct point of reference: (a) the service provider's taxable year; (b) the estate's taxable year, which begins on the date of death; or © the designated beneficiary's taxable year? 2. If the payment is late, and assuming that the service provider was an insider up until death and that the designated beneficiary was a non-insider, for purposes of correction under Notice 2008-113, are you still subject to correction under the "insider" rules or, because the service provider was no longer able to influence the payment date can you correct under the "non-insider" rules? Thanks.
  9. If the vesting date and the date or event entitling the participant to payment have indeed come and gone (usually one in the same in a 457(f) plan), any opportunity to change that has probably also come and gone. (I say "if" and "probably" because there is no substitute for a close reading of the plan document.) Moreover, since this is a 457(f) plan, you probably wouldn't have wanted to do such an amendment anyway (even if it were done ahead of time) since in a 457(f) plan the vesting date is the functional equivalent of the date when the full accrued benefit is taxed, without regard to when it is scheduled to be paid out. There might have been some small benefit in spreading out the taxation of the earnings that the plan generates subsequent to the vesting/full taxation date, but to simply spread those out over 5 years probably isn't worth the trouble.
  10. Thanks - I was a little sloppy in referring to the "draft" in my original post when the actual term should have been "proposed restatement." They don't really define "proposed retatement" anywhere that I've found (Rev. Procs. 2012-6 and 2013-6 and their annual predecessors; as well as Rev. Proc 2007-44, Rev. Proc. 2005-66). I'm a little slow, but I think what you are saying is that an unexecuted document that is labeled a "proposed restatement" is still OK if that's the document you intend to adopt, as is, once the favorable determination letter is issued - but a working copy is different in that it isn't necessarily how the final restatement will read and does nothing more than show where previously adopted and executed amendments fit into the previous version of the document. Is that correct?
  11. In the latest issuance of its determination letter Rev Proc (Rev Proc 2013-6, Section 7.05), the Service appears to have eliminated the option that has existed for quite a few years now to submit a working copy of a plan restatement rather than the finalized and executed restatement (see, e.g. Rev Proc 2012-6, Section 7.05). Rev Proc 2013-6 says that its effective date is February 1, 2013, so apparently the last few Cycle B submissions that will go in before the end of January willl not be affected by the change. The ability was one of the more user friendly aspects of the determination letter program. For one thing, you could build whatever changes the IRS might request into the restated document before it is adopted and without having to draft and adopt an add on amendment to the newly restated plan. I just don't see the logic - has anyone seen or heard anything as to the rationale for this change? Or am I missing something here? - I went around with an IRS specialist on an application last year over whether my "working copy" was a "draft" or a "working copy," which largely struck me as a distinction without a difference. Any comments or other input would be appreciated!
  12. After speaking with their third party administrator, an employer said that with respect to plan loans they were going to make one type of subaccount "lienable," but not "loanable." I know that it not being loanable means that you can't take loans against that subaccount, but I'm not sure what making the subaccount lienable actually entails. Anyone familiar with this terminology and know what the distinction is?
  13. 7806akp and LeeNunn, I don't get why approach #2 works at all. If you have a taxable event in year 3, you report it in year 3. If you have taxable events in years 1 and 2, what makes them taxable events (or even reportable) in year 3? Granted, there are things in the benefits world that remain open until corrected - but what's the authority for that happening here? Why wouldn't this be more analogous to the defaulted qualified plan loan that should have been reported as a taxable distribution but wasn't (and now that the tax year is closed the taxpayer has -regrettably to some and triumphantly to others - "skated" on the taxability of that default)?
  14. A tax-exempt has two 457(f) plans for two different executives. One plan has a vesting and payment trigger for disability and the other does not. An attorney for the organization who has no particular specialization in employment law or benefits law is questioning whether the difference is a problem under the Americans with Disabilities Act. I've never really heard that question posited before. Has anyone else come across this issue? Thanks!
  15. I'm trying to get a handle on just how powerful the short term deferral rule is in allowing flexibility in 457(f) plans that would not otherwise be permitted under 409A. Does the inapplicability of 409A to 457(f) benefits that remain subject to a substantial risk of forfeiture mean that you work under the far more flexible "pre-409A" rules that govern 457(f) plans alone? Let me give an example that I don't think pushes the envelope too hard: in 2009 tax-exempt employer promises its top executive that he/she will receive $25K each year for 10 years beginning January 2016 if he/she remains continuously employed through January 1, 2016. In 2012, parties instead want to revise the agreement to provide a lump sum payment of $250K on January 1, 2016 if executive is continuously employed through that date. In this example, vesting and timing of benefit are the same before and after the change. If 409A applies, any change in the timing and manner of payments would necessarily push out the payment/vesting date by 5 years to 2021. If not subject to 409A because of the short term deferral rule, I'm supposing you can keep the January 1, 2016 date (in spite of the change in the timing and manner of payment) without fear of causing a 409A problem? As noted, I don't think this example pushes the envelope that hard in terms of many of the more aggressive "pre-409A" 457(f) strategies. I'd apprecaite your thoughts and ideas.